Mortgage repayments at most their most affordable in eight years

The Momentum UK Team 09 December 2011

It's good news for first time buyers as low interest rates have encouraged the most affordable monthly mortgage interest payments seen since 2004, according to latest figures from the Council of Mortgage Lenders (CML).

The figures suggest monthly interest payments will typically cost around 12.3% of monthly income for first time buyers, and around 9.2% for movers.

In spite of improving affordability first time buyer loan approvals were down 8% on September 2011 figures and down 5% on October 2010 figures.

Although the overall number of first time buyer mortgage loans fell by 10% across the last month, the figures were only down 1% compared to last year.

The decline could be put down to an uncertain economic future and deposits remaining forbidingly high for many at an average of 20% of the value of the property.

The Director General of CML, Paul Smee, said in a statement:

"Despite the fall in lending in October, it is possible that we will see signs of increased activity by first-time buyers in the early months of next year, as we approach the end of the government's stamp duty concession at the end of March. The underlying picture of the market overall, however, is level, albeit at low levels of lending activity."