Mortgage costs continue to fall
The Council of Mortgage Lenders (CML) has today confirmed that the cost of UK mortgages has fallen to a five-year low. The percentage of income required to cover the average mortgage payment has now fallen to 12% which will bring more and more people into the mortgage market and hopefully improved demand for property.
While it has to be said that the average household income has also fallen over the period in question, being able to finance your mortgage on just 12% of your household income does hold attractions. However, one of the reasons why mortgage costs have fallen so markedly over the last five years is because more and more mortgage lenders are demanding large deposits. Indeed the average loan to value for the first-time buyer has fallen from 83% in 2008 to 75% in 2009.
While there is no doubt there are some attractive opportunities in the UK mortgage market, UK lenders are now possibly being overcautious and demanding larger and larger deposits which is distorting the figures a little. The ability to create a cushion between the funds borrowed against a property and the value of the property is vital in the short to medium term to allow UK banking institutions to rebuild their balance sheets.
Share this..
Related stories
Will the government's mortgage relief plan avoid or just delay repossessions?
With news that the Council of Mortgage Lenders in the UK fully expects repossessions to hit 75,000 in 2009 alone there is speculation that the government's much heralded mortgage relief plan will have very little impact on the market. Despite being announced a couple of weeks ago we are yet to see the fine print of the mortgage relief package and confidence in government's ability to reduce the nu...
Read MoreEven The Building Societies Are Feeling The Pain
News that half year profits at the Britannia Building Society have fallen by 36% compared to the same period last year is evidence that the credit crunch is now hitting the Building Society sector where historically the need to squeeze as much profit as possible out of customers has not been paramount. Mutual lenders have grown in popularity over the last decade as the financial restraints were l...
Read More'Big savings possible for variable rate mortgage holders'
Mortgage holders should use a cut in interest rates tomorrow to reduce their repayment term, a price comparison site has said. Analysts widely expect the Bank of Englands monetary policy committee to cut interest rates by 0.25 per cent tomorrow. Homeowners who stand to benefit most from this are those on variable rate deals and trackers, who will find their repayments significantly reduced....
Read MoreMortgage Rate Cuts Welcomed - Again!
News that more mortgage rates have been cut across the sector has been welcomed - again - by the consumer but are first time buyers really getting value for money? Are they really benefitting by as much as the mortgage providers would have you believe?
The latest companies to cut rates are Alliance and Leicester where their tracker mortgage rate has been trimmed by 0.55% to 6.19% on...
Landlords invest mainly in fixed-rate deals
Although recent a study has shown that most buyers are split almost exactly in half when choosing between a variable or fixed-rate mortgages, landlords are not so indecisive, according to research.According to Paragon, as many as 70 per cent of buy-to-let investors have opted for fixed-rate deals, safeguarding themselves against a much anticipated rise in the interest rate.Even though fixed-rate m...
Read More