Good news and bad news for first-time buyers
Friday, 9 December 2011 12:17 PM
Home loans for first-time buyers are at their most affordable for nearly eight years, according to Council of Mortgage Lenders (CML).
Lending data for October showed that monthly interest payments took 12.3 per cent of the income of an average first-time buyer. That is the lowest since January 2004.
However, if that was the good news, the bad news was they still had to find a 20 per cent deposit and the average purchase was 3.2 times their income.
And loans to first-time buyers were down 10 per cent on September and one per cent on October 2010.
Home movers also saw an improvement in affordability with mortgages taking up 9.2 per cent of their income. Yet again that was the lowest since CML records began in 2002.
But the number of loans to them was also down – by seven per cent on September and eight per cent on a year ago.
Paul Smee, CML director general, said: "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."
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