Lending up in August as fixed-rates fall in September

10-Oct-2007

The Council of Mortgage Lenders (CML) has revealed that the number of loans approved for house purchase in August rose by five per cent month-on-month to reach a total of 99,000.

While this indicated that first time buyers were still able to get onto the property ladder over the summer, there was less good news elsewhere in the CML's latest report – with debt servicing burdens at their highest level for 16 years.

The typical first time buyer mortgage saw new buyers borrow an average of 3.38 times their income, the CML added – a figure that remained constant from July.

But separate data from the Bank of England has shown that the cost of two-year fixed-rate deals, the most popular mortgage on the market, fell in September, indicating that the Northern Rock crisis had not stopped lenders from providing more attractive deals.

Lower swap rates are likely to be behind the decrease, according to Reuters, while other lenders are now beginning to revamp their product ranges in order to attract first time buyers put off by slowing house prices back to the market.

Bristol & West Mortgages has said that it is launching a range of new mortgages including those with low start rates, lower fees or with an income multiple of 4.5.

"Our new campaign is specially designed to help our customers get onto the property ladder. Whether they need extra cash up front, the benefit of assistance with fees, a low up front rate, or great income multiples, we are here to help," advised Alison Pallett of Bank of Ireland Personal Lending UK.

Doubts over first time buyer demand
http://www.firstrungnow.com/first-time-buyer-news/doubts-over-first-time-3492.aspx


First time buyers see prices fall
http://www.firstrungnow.com/first-time-buyer-news/first-time-buyers-see-3528.aspx

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