Mortgages are at their most affordable for 35 years, according to recent figures. The Council of Mortgage Lenders (CML) reports that, as a proportion of our incomes, mortgage payments are at their lowest since records were first kept back in 1975. Those moving home spent an average of 9.5% of their income on interest payments in May. Meanwhile, first time buyers spent 13.2% – the lowest amount since 2004.

And with low interest rates continuing to benefit borrowers, lending to house purchasers has increased – along with the number of remortgages.

The number of home loans rose by 2% on the previous month, contributing to a 15% rise over the 12 months since May 2009. There were 6% more remortgages than in April – worth 10% more in money terms. There was also a small rise in the number of loans made to first time buyers, as they benefited from a wider range of products and greater flexibility on the part of some lenders.

The CML has previously forecast that there will be £150 billion of mortgage lending this year. They are now concerned that tough economic conditions will make things trickier for borrowers and make lenders more cautious. In that event, they say, their prediction could turn out to have been too optimistic.

But given current interest rates and the range of products available, borrowers will be looking carefully at the mortgage and remortgage deals on offer.

Tags: Economy, Housing Market, Industry, Markets

This entry was posted on Tuesday, July 13th, 2010 at 1:34 pm and is filed under Current Market News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.