According to the Council of Mortgage and Lenders, the UK’s mortgage affordability has become the worst that it has been in 15 years. This was announced as figures from October showed that interest rates have consumed the highest levels of income.
The market has been watched constantly over the last year. Figures have shown that first time buyers tend to contribute around 20.6 percent of their annual income on their mortgage. In September that figure was 20.4 This is obviously not good news for first time buyers, but it is not only them who are suffering.
However, despite these increases, The Bank of England has decided to cut its interest rates by 25 basis points and that is likely to help out many people. The lending rate for mortgages was £30.6 billion in September, but in October it had risen to £33.5 billion which is a dramatic increase. This increase however is said to be short lived.
As the year draws to a close, it is thought that lenders are starting to become a little more aware of who they are lending to. They recognise that there is a problem when it comes to mortgages and their affordability. The last thing a lender wants is to lend money to a consumer, only to find that they cannot repay that money. So they are cracking down a little from next year and October this year is thought to be the last year when figures were higher than the year before.
Overall getting a mortgage is extremely difficult these days. First time buyers in particular are struggling to get onto the property ladder and many are forced to live with their parents until they are in their mid-late twenties. Existing homeowners are also suffering as their mortgages steadily increase to a level that they can no longer afford.
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