UK mortgage lending ‘getting cheaper’

The average share of personal income required to take out a mortgage is at its lowest level for five years, according to new research.

A study by the Council of Mortgage Lenders (CML) showed that those moving home only needed to spend 10.6 per cent of their gross income in November last year to take out a homebuyer loan, down from 14.4 per cent 12 months before.

The CML said this was the lowest figure since it began collecting such data in 1974, bar a brief drop to 10.2 per cent in mid-1996.

It said that first-time buyers now need 14.4 per cent of their income for a mortgage, down from 18.2 per cent in November 2008 and the lowest level since 2004.

These figures may encourage those looking for a homebuyer loan.

Such a view was expressed by president of the National Association of Estate Agents Gary Smith.

However, he said, it was “hardly surprising” that costs were down in view of the interest rate cuts that have taken place in the past 12 months.

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