First-time buyer group rubbishes CML claims

Friday, 16, Jul 2010 05:30

A specialist first-time buyer advice company has rubbished statements made earlier this week by the Council of Mortgage Lenders (CML).

The CML said earlier this week that people moving home in May saw their mortgage interest payments accounting for the lowest proportion of their income in 35 years.

However, according to Paul Holmes, chief executive officer of Firstrung, such a statement is "completely ridiculous" for a number of reasons.

It is not wise to take comfort from the fact that interest rates are extremely low and have been for some time, while it is also poor judgement to mention the interest-only proportion of a mortgage in isolation, Mr Holmes argues.

"Simply to clumsily attach the interest-only element to an interest only mortgage is inaccurate on the part of the CML to use that metric as some kind of justification that all is well on the mortgage market," he said.

Mr Holmes concludes by saying that the key factor for homeowners is how they intend to pay off their debt for the next 25 years.