Mortgage payments 'taking up less household income'

November saw house buyers use less of their household income to cover their interest payments than at any time since 2005, latest figures have indicated.

According to the Council of Mortgage Lenders CML, home movers needed only 10.6 per cent of gross income to cover such monthly payments, down from 11.1 per cent in October.

The debt burden on first-time buyers also reduced, with 14.4 per cent of gross income needed in November, down from 15.1 per cent the previous month.

Commenting on the data, CML director general Michael Coogan said it was "encouraging" to see mortgage interest payments "so affordable" for many homeowners.

"But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come," he stated.

"With refinancing still unattractive or unnecessary for many borrowers due to continuing low rates, we are now seeing a much more house purchase-focused market."

Last week, the CML reported that overall lending increased to £13.7 billion - a 14 per cent rise on November – which potentially is good news for buyers seeking cheap mortgage rates.

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2010-01-26 13:51:04 © Moneyextra.com