UK Finance boss says first-time buyers have been impacted greatly by rate rises

A typical first-time buyer in 2023 would have needed to stretch their loan out for half a century to achieve the same level of affordability that they would have had across a 30-year mortgage term in 2022, according to David Postings, chief executive of UK Finance. He highlighted the impact of rapid interest rate rises on first-time buyers and suggested that house prices may stagnate as affordability remains stretched. The number of mortgages handed out to first-time buyers in 2023 was the lowest since 2013, down 22.4% compared to the previous year. Despite this, 287,000 loans with a value of £58bn were advanced to first-time households. The squeeze on incomes has seen mortgage arrears rise, but stricter affordability tests have protected lenders and borrowers to a great extent, Mr Postings said. As a result, arrears remain at low levels when looking back at historical comparisons, he added. 

The Daily Telegraph (09/03/2024)   The Independent (09/03/2024)