11 Dec

Mortgage affordability has worsened, says CML

Mortgage affordability has worsened, says CML

Mortgage affordability continued to worsen in October, especially for first time buyers, according to data from the Council of Mortgage Lenders (CML).

Data from the CML shows that first time buyers used an average of 20.6 per cent of their income solely to pay mortgage interest in October.
This stands as the highest proportion since 1991 and is up 0.2 per cent from September.

Home movers are also feeling the squeeze, the CML said, spending 17.6 per cent of their income to pay interest on their mortgage.

However, an improvement will be noted next year should the Bank of England act according to expectations and introduce further cuts to rate of interest next year, Michael Coogan, director general of the CML predicted.

"For those customers coming to the end of their fixed rate mortgage in 2008, the potential impact of higher monthly payments will be diminished by the fall in bank rate this month and other rate reductions to come early in the New Year," he explained.


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