Finance sector news
Mortgage lending continues to slide
13/3/2009Mortgage lending activity continued to reduce in January with only 23,400 loans for house purchase completed, down from 32,400 in December and 48,600 in January 2008, according to new data from the Council of Mortgage Lenders.
The decline in house purchase lending was spread evenly between first-time buyers and home movers.
Lending criteria were tightened further in response to the worsening economy and falling house prices, creating a barrier for many first-time buyers wishing to enter the market. The typical first-time buyer deposit in January was 24%, the largest amount on record.
But at the same time lower interest rates and income multiples have made payments easier for those able to obtain credit. First-time buyers typically borrowed 3 times their income in January and the average loan was £97,000.
The average home mover borrowed £117,300 and spent 11.9% of their income on interest payments - the lowest proportion since March 2004.
