Government help for mortgages “too slow”

The government should act more quickly when providing aid for mortgages to people in financial difficulties facing repossession, says National Homebuyers. Read more

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Record mortgage lending figures

New figures from the Council of Mortgage Lenders (CML) show that we borrowed a record amount of money in March 2007.

In total, £31.3 billion was leant to people who took out a mortgage on a house, representing an all-time record for lending figures in March.

It is the most amount of money that has ever been borrowed during the month of March and shows that the housing market is still very strong.

The figure for March represents a 22 per cent increase on the amount borrowed in February and a 10 per cent rise on the £28.3 billion which was leant in March 2006.

“This is the highest-ever March lending figure,” said Michael Coogan, director general of the CML.

“It is clear that many borrowers are taking sensible steps to shelter against higher mortgage costs.”

Despite the increasing figures, the CML says that the high levels of mortgage lending may not continue for much longer.

“There is still a question mark over just how strong mortgage lending will be over the coming months as the prospect of higher interest rates takes its toll on demand,” added Mr Coogan.

“But, we continue to expect mortgage lending to reach a record £360 billion this year.”

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First-time buyers face unaffordable homes

First-time buyers were faced with the least affordable homes ever during November 2006.

That is according to the Council of Mortgage Lenders (CML), which has compiled data showing that the average homes cost 3.29 times the combined income of the buyers.

These figures represent the situation before the recent interest rate rises, meaning the market is likely to become even harder to get on to.

During November, the average mortgage for a first-time buyer was £113,877, with analysts saying that the recent interest rate rises will add a further £200 per year to the average mortgage.

“Month-on-month we see affordability constraints becoming more pronounced for first-time buyers, and last week’s interest rate rise will increase these pressures,” said Michael Coogan, CML director general.

Homeowners are now spending a record-breaking 17.8 per cent of their income on mortgage interest payments, but this has not stopped people from entering the market.

CML data shows that the number of first-time buyers is steadily increasing. In total, 37,000 people bought their first home in November, up from 35,300 in October.

“First-time buyers are clearly still keen to get on to the property ladder despite the growing financial hurdles, and it is essential that anyone wanting to buy their first home should look carefully at their finances and take a realistic view as to whether they can afford the costs of home-ownership if rates continue to rise,” added Mr Coogan.

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