Positive Home Loan Trend Continues in May

Fri, 16 Jul 2010

The Council of Mortgage Lenders (CML) have revealed a 2 per cent increase in the number of loans approved for house purchase in May compared with the previous months, with analysts predicting that the low base rate will see approvals continue to rise. 42,000 mortgages were approved in May, representing an increase not only on the previous month, but also a 15 per cent increase on the same month of 2009.

The CML also confirmed that the low interest rates are easing borrowers mortgage repayments, with home loan interest payments accounting for the lowest proportion of home movers’ incomes for 25 years. Just 9.5 per cent of average income was spend on mortgage interest payments, though this figure was higher for first time buyers, who are spending an average of 13.2 per cent of their income on interest repayments.

The low interest rates have undoubtedly reduced the difficulty faced by first time buyers in getting on the property ladder, though many still struggle to save a large enough deposit. Meanwhile, the figures for May mean that the number of loans approved for house purchase has now risen for 11 consecutive months.
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