Eight years since Mortgage were so Afforadable – says CML

Council of Mortgage Lenders (CML)The Council of Mortgage Lenders figures for October shows that mortgages are the most affordable for eight years – greatly helped by the low interest rates that have been held for over 2.5 years.

First time deposit requirements have also remained stable in recent months, at an average of 20% – however their monthly interest payments have continued to fall, now typically consuming  12.3% of their income.

Movers again are seeing great affordability with mortgage interest only making up an average of 9.2% of their income – the lowest since 2002 when records began.

Heavy bear on lending activity

Yet although affordability is greatly improved, the continuing uncertainty in the economy means a lot of pressure is still on the overall lending.

House purchase lending was down to 44,500 in October from 48,200 the month before.

Remortgaging was also down to 28,9000 from 34,200 in September.

Paul Smee, CML director general, commented:

“Despite the fall in lending in October, it is possible that we will see signs of increased activity by first-time buyers in the early months of next year, as we approach the end of the government’s stamp duty concession at the end of March. The underlying picture of the market overall, however, is level, albeit at low levels of lending activity.”

Written by Julie Hanson

Julie is passionate about property – development, investment and portfolio planning. Along with husband Alec, Julie is actively building a property portfolio while helping others to do the same.

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