House purchase lending rises as mortgage costs fall

House purchase lending rises as mortgage costs fall

The Council of Mortgage Lenders (CML) has reported that house purchase lending accounted for 35% of all mortgage lending in March, up from 31% in February and the highest proportion since December 2007.

First-time buyers put in a stronger presence, accounting for 40% of house purchases, up from 38% in February.

However, the number of first-time buyers remained low at 12,500, compared to 17,800 in March 2008 (not seasonally adjusted).

The average first-time buyer borrowed three times their income and 75% of their property’s value, with the figures unchanged from February.

While remortgaging showed an 8% rise, the proportion was down 45% year-on-year, largely as a result of borrowers remaining on their lenders’ relatively attractive standard variable rates when fixed-rate deals end.

According to the CML, both first-time buyers and home movers are benefiting from the lowest debt servicing costs since 2004, with monthly interest payments equating to an average 15.1% of income in March.

The body’s head of research Bob Pannell comments: “Because the flow of lending is still constrained, there is a sharp dividing line in the housing and mortgage markets between those who can raise a substantial deposit and those who can’t.”

He adds: “For those who can, the burden of debt payments is low and mortgage interest is consuming proportionately less income than for a number of years … but for those without substantial deposits, entering the market is still both difficult and uncertain.”

Tags: , , , , ,

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 2256 times, 1 so far today