Mortgage market 'will become more affordable' for first-time buyers

10-Jun-2008

First-time buyers have been reassured that the mortgage market will pick up again once liquidity starts to return.

According to Peter O'Donovan, the head of mortgages at Bestinvest, the market may not return to how it was six months ago, but lenders will begin to relax.

"I don't think the Bank of England will allow mortgage rates at eight per cent and a base rate at four and a half per cent," he remarked.

"For first-time buyers the market will start to become affordable to them again," he continued.

"The rates are higher but they'll be able to find the ten per cent deposit that is needed at the moment to get a mortgage."

Data from the Council of Mortgage Lenders indicate that April saw gross mortgage lending reach an estimated £25.3 billion, a five per cent increase from March and an eight per cent decline from April last year.

The organisation predicts house prices will be around seven per cent lower at the end of this year compared to the end of 2007.

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Rate decision signals first-time buyer stability, says specialist Housing market 'continues to be stable'

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