Mortgages in October 'most affordable since 2004'
Friday, 09 December 2011 02:57
Mortgage payments in October 2011 hit their most affordable levels since 2004 as low interest rates helped to ease the financial pressure on homeowners.
This is according to the Council of Mortgage Lenders (CML), which said monthly interest payments for first-time buyers made up only 12 per cent of income during the four weeks.
Meanwhile, movers had to spend only 9.2 per cent of their budget on mortgage interest in October, the lowest seen since 2002.
However, the market was slowed somewhat by the large deposits still required by people buying a property for the first time, which stuck around 20 per cent.
As a result, 44,500 home loans were taken out that month, down from 48,200 in September and 46,900 in October 2010, with first-time buyers made up 16,400 of this total.
Repayment mortgages remained popular, with 97 per cent of first-time buyers and 83 per cent of movers going for this kind of deal.
CML director-general Paul Smee said it is possible that there will be a rise in mortgage lending in the early months of next year as people rush to take advantage of the reduction in stamp duty, which ends soon.
"The underlying picture of the market overall, however, is level, albeit at low levels of lending activity," he added.
Last month, the British Bankers Association said the average value of a mortgage was £145,000 in October, although approvals were 16 per cent higher than in the corresponding period for 2010.
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