Thu, 14 Aug 08
The average homebuyer is having to put down a 22% deposit in order to secure a mortgage deal, according to latest figures from the Council of Mortgage Lenders.
The figure for the average deposit in June is an increase of 2% on the previous month and another indication of the tough stance being taken by lenders due to a shortage of funding in the sector.
Other figures for June show that the average first time buyer borrower 3.33 times their income, down from 3.35 in May. The average home mover borrowed 2.94 times their income, which is down on May’s figure of 2.97.
CML head of research, Bob Pannell said: “Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand.
“The majority of lending continues to be to people with larger deposits, which is prudent for borrowers and lenders in a slowing housing market.”
First time buyers in particular are feeling the squeeze in lending. During June there were 18,100 loans to first time buyers worth £2.3bn, an 8% decline in volume and a 9% drop in value on May’s figures.Gross lending also decreased slightly to £23.6bn, down 4% from May.
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