Advisers predict house prices will fall following research which shows that first-time buyers and homemovers are paying the highest mortgage costs in 15 years.
The Council of Mortgage Lenders says interest payments are now 18.7 per cent of first-time buyers’ income compared with 18.3 per cent in March. Homemovers are paying 16.3 per cent, up from 16.1 per cent.
Highclere Financial Services partner Alan Lakey says first-time buyers are struggling and moving to cheaper areas. He says: “They have worked out they might as well buy a bit further north and save money. In doing so, they are pushing up prices locally which means local people are going even further north.
“Eventually, it has to stop because you cannot keep going north or west. Maybe we will get the correction we keep thinking is round the corner. I do not think there is any doubt it is going to happen, the only doubt is when it is going to happen.”