First-time buyers 'hold back'

High property prices are preventing an increasing number of first-time buyers from getting a foothold on the property ladder, according to the latest figures.

The Council of Mortgage Lenders said 30,000 first-time buyers entered the market in June, compared with 48,000 in June last year.

The percentage of first-time buyers is at its lowest level for at least 10 years, and accounted for only 29% of all mortgage borrowers, compared with 44% in June last year.

Remortgaging exceeded new lending, with £9.7bn taken by people moving house, but even more - £10.3bn - was borrowed by people remortgaging.

Priced-out

This is beginning to make it harder for sellers further up the chain to sell their properties Michael Coogan, CML

"Despite very affordable mortgage rates, high house prices are making it difficult for first-time buyers to enter the market," said CML director general Michael Coogan.

"This is beginning to make it harder for sellers further up the chain to sell their properties. This is one of the reasons why the CML expects the slowdown in momentum to continue, as lending discipline and affordability will constrain the potential for rapid house price growth."

But strong regional variations meant there would be "many areas where house prices could continue to grow strongly", said Mr Coogan.

Other areas, however, will be "constrained by affordability problems".

Just over half of all mortgages taken out in June were at fixed rates, with the average rate being 4.19%.

Variable rates accounted for 47% of lending, at an average rate of 4.06%.