First time buyers spending less on mortgage payments

16-Feb-2006

First time buyers are spending less of their income on making mortgage repayments, according to the Council of Mortgage Lenders (CML).

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Figures released by the CML indicate that deals are becoming cheaper, encouraging more aspiring homeowners to take out mortgage agreements.

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They showed that the proportion of income used to pay off mortgage interest payments had fallen throughout 2005.

First time buyers spent an estimated 15.9 per cent of their wages on the payments, according to figures for the fourth quarter of the year, compared to 16.8 per cent earlier in 2005.

Property analysts believe that many lenders are targeting the first timer market and are therefore offering special deals and low cost offers, ensuring that they return to the market.

The CML figures also showed an increase in the popularity of fixed-rate mortgages, attributed to the cut in interest rates back in August, as fixed-rate deals are not affected by headline interest rates.

"People are taking advantage of current low rates and the deals on offer," explained said Christopher Dean of the CML.

"They feel that interest rates are at a low and that they may go up soon. Because of that the fixed rate deals are very attractive at the moment."

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