Mortgage market improving for first time buyers

Mortgage market improving for first time buyers

The number of first time buyers increased significantly last year as more high loan to value (LTV) mortgages became available, according to the latest Mortgage Monitor from e.surv chartered surveyors.

The number of mortgages advanced at an LTV of 85% or more increased by 32 per cent to 57,301 in 2011 compared with 43,379 in 2010 and lenders also relaxed the qualifying criteria on this type of mortgage.

The average deposit fell to 38 per cent in December 2011, compared with 41 per cent in December 2010 and for the year as a whole, the average deposit fell to 39 per cent, compared with 43 per cent in 2010.

The number of mortgages approved on first time buyer property (worth £125,000 or less) in December 2011 soared by 25 per cent to 12,343, compared with 9,873 in December 2010.

According to the survey, lending conditions are at their most favourable for buyers since August 2007.

Richard Sexton, director of e.surv, said: ‘The improvement in 2011 is modest, but when taken against the backdrop of the eurozone crisis and turgid economic growth, it’s clear the market demonstrated real staying power last year,’

Barclays also revealed the results of its latest mortgage survey, claiming that mortgages in 2011 were the most affordable since records began 10 years ago.

The survey, based on data from more than one million customers’ accounts, found that homeowners spent an average of 15.4% of their take-home pay on their monthly mortgage payments last year compared with 20.5% in 2008.

In September 2011, the typical monthly mortgage payment fell to £488 a month, representing 15.2% of take-home pay.

Head of mortgages at Barclays, Andy Gray, said: “With the cheapest ever mortgage deals offered to homeowners last year and the fiercely competitive mortgage market, it stands to reason that the average monthly mortgage payment was at its most affordable level in a decade.”

Tags: , lending conditions, , mortgage survey

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