Thursday 14th June 2007
First-time buyers are facing disaster by taking on unmanageable levels of debt, it has been claimed.
Liberal Democrat shadow chancellor Vince Cable warns that young people should not be lured into taking out loans which they cannot afford.
"A generation of young people are now finding it impossible to get onto the housing ladder except by borrowing at levels which are ludicrous and dangerous.
"Unfortunately some mortgage lenders are inviting disaster by doing just this," Mr Cable states.
His comments follow the publication of statistics by Nationwide which suggest that first-time buyers are now spending about half of their take-home pay on mortgage repayments.
Figures released by the Council of Mortgage Lenders this week show that first-time buyers are facing their greatest affordability problems since 1992.
The council adds that this is compounded by a seven per cent year-on-year increase in the number of young people paying stamp duty on their first purchase.
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