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Mortgage costs are at an all time low!

Friday, December 30, 2016 5:25:00 PM

New data from the Council of Mortgage Lenders shows that mortgages are now more affordable than at any other time on record.

First-time buyers paid an average of 17.8% of their household income towards their mortgage in September, while home movers paid 17.7%. The CML said that mortgage affordability was at an historic low, which should help those looking to get on the property ladder.

This comes after the Bank of England cut interest rates to a new record low of 0.25% in August following Brexit, resulting in a number of mortgage lenders cutting interest rates.

Paul Smee, director general of the CML, said: "Mortgage affordability reached an historic low in September, for both first-time buyers and home movers, which partly reflects the re-pricing of mortgages following August's base rate cut. "This should help turn strong appetite for home-ownership into a reality as we approach the new year." £11.4 billion was buried for house purchases, down 7% for the month but up 4% from last year. They took out 62,900 loans, down 5% on August but up 3% on September 2015.

Lending to first-time buyers fell 4% to £4.9 billion, equating to 31,500 loans. Remortgages fell 7% to £5.9 billion, but was up 8% compared to a year ago. This totalled up to 31,500 loans, down 10% month-on-month but up 2% compared to 2015.

Buy-to-let lending has been hit hard by the stamp duty changes that were introduced in April. Landlords borrowed £2.8 billion, down 7% for the month and 22% since last year.

Smee said: "House purchase activity appears to have steadied, we may not be seeing huge increases in activity on the scale of 2013-14 but there is a consistency in the levels in recent months. "Six months on since the stamp duty changes on second properties and buy-to-let continues to operate at lower levels than a year ago, but lending for buy-to-let house purchase and remortgaging has settled at its current level over the last four months."

David Brown, CEO of Marsh & Parsons, said: "Low interest rates have improved affordability for buyers and helped drive activity for those who can get great deals. Therefore, while uncertainty remains about the outcome of Brexit negotiations, confidence in property remains high for hopeful homebuyers, investors and sellers. "In London, particularly, the market could still be buoyed by the weaker pound and added interest from overseas buyers - boosted by results of the US Presidential election as Americans potentially seek solace elsewhere.

If you are looking for a mortgage to purchase a new property, we would welcome the opportunity to discuss your requirements here at The Mortgage Brain in Gloucester. Please give us a call on 0333 340 8888 or email info@themortgagebrain.net. We look forward to hearing from you







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