Interest payments most affordable for five years
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Home owners now need less of their income to cover their mortgage interest payments than at any time in the past five years.
Latest figures from the Council of Mortgage Lenders show that home movers needed just 10.6% of gross income last November to cover mortgage interest payments, down from 11.1% in October.
With the exception of a brief low in 1996 this is the lowest burden on owners since 1974 when the CML started recording the data.
The first-time buyer debt burden also fell from 15.1% of gross income needed in October to 14.4% in November, the lowest it has been since May 2004.
Some 53,000 house purchase loans were advanced in November, down 4% on the previous month but up 66% compared with November 2008.
Loans for house purchase in Nov-ember accounted for 60% of total new lending, the highest proportion since 2001.
But remortgage loans declined to 31,000 in the month, a 6% drop from October and a 39% year-on-year fall.
Michael Coogan, director-general of the CML, says: “With substantial deposits still needed to secure a mortgage the market will continue to be relatively restrained for some time.”
But figures from Connells Survey & Valuation show that between August and December 2009 the number of valuations was up by almost 20% compared with the same period in 2008.
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