12
Feb
Affordability 'to ease after rate cuts'
Home affordability should be improved in 2008 due to the recent
cuts to the base rate of interest by the Bank of England, according
to the Council of Mortgage Lenders (CML).
While debt levels for homeowners, including first-time buyers,
worsened towards the end of last year, the situation could be about
to improve thanks to base rate cuts, the CML said.
In December, first-timers contributed "typically" 20.7 per cent of
their incomes to mortgage interest, it noted, up from 17.9 per cent
the year before, but the figures do not consider the rate
cuts.
Michael Coogan, director general at the CML, claimed that recent
developments are great news for consumers.
"Affordability has been stretched further in 2007 but the recent
base rate cuts and the expectation of future cuts will ease debt
servicing burdens in 2008," he commented.
He added that the payment shock of those leaving fixed-rate deals
will also be lower than the company previously predicted.
Earlier this week, the Department for Communities and Local
Government said that there had been a small rise in house prices in
December.