Changes in the housing market announced by the CML
First time buyers are showing an unwillingness to overcommit in today's current housing arena. At one time last year it was normal to borrow 3.3 times your income - if not more in some cases. Now it has fallen to 3 times their income.
We have seen house prices rise so that the average house price is approximately £180,000 - a massive tripling of property value in just 10 years. This caused many problems with first time buyers being unable to afford to get their foot on the first rung of the property ladder.
Many desperate to get a mortgage ended up borrowing huge amounts of money - some up to 5 times their salary in order to ow their own property - a worry when interest rates started to rise. It now seems that first-time buyers are being much more sensible about what they can afford.
This latest news has been revealed by the Council of Mortgage Lenders (CML) today as well as reporting a drop in numbers of properties being remortgaged which are down from 93,000 to 73,000. This ties in with the reduction in mortgage approvals over the past few months which has seen a steady decrease.The market is also seeing a trend in people taking out variable rate mortgages as the number of fixed-rate mortgages dropped. The current cuts in interest rates have been blamed for this as homeowners attempt to cut their monthly repayments by reducing the interest they pay.
This uncertainty within the property market should hopefully be short-lived and return to normal later in the year as consumer confidence rises and the market stabilises.
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