18 Jun

CML: Profile of borrowers changed after credit crunch

CML: Profile of borrowers changed after credit crunch

The Council of Mortgage Lenders (CML) has suggested that the "profile" of mortgage borrowers has altered in recent months as a result of the credit crunch.

It noted that affordability would appear to have improved in April for new mortgages, as first-time buyers put down the highest deposits in over three years and took out loans for 3.3 times their income, the lowest level since November 2006. The average home-mover loan was also at its lowest level proportional to income since July 2006.

However, the organisation stated that this does not necessarily mean affordability has got better. Rather the "profile of borrowers has changed" as demand for mortgages outstrips supply of funding and fewer people are able to secure loans.

"By tightening lending criteria, lenders are selecting less risky borrowers, who have larger deposits and want to borrow less relative to their income," the CML commented.

A survey released yesterday by Moneyfacts revealed that the cost of mortgages has risen to its highest level in a decade.

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