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Mortgage availability continues to grow

Mortgage availability continues to grow

Category: Mortgages

Updated: 17/05/2010
First Published: 17/05/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Lending to home buyers increased by 45% in the 12 months to March, the ninth consecutive month of annual growth.

Some 45,000 loans for house purchase were given in the month, according to the Council of Mortgage Lenders (CML), well up on March 2009 and a quarter more than in February.

In total, £6.3 billion was lent to home buyers in the month, bringing the total for the first quarter of the year to £16.1 billion.

First time buyer (FTB) activity also offered some encouragement, with 17,300 loans worth £2 billion given out, up by 27% on February and 42% on March 2009.

On average, FTBs borrowed an average of 76% of property price for the second month in succession. It marks the first time since January 2007 that average deposits for FTBs have been less than 25%.

The figures chime with research which recently found that the availability of mortgages that require smaller deposits is increasing.

The welcome trend of increasing availability has been complemented by a number of competitive mortgage deals that have become available to potential homeowners.

Those with a 30% deposit who are confident that the low interest rate environment may continue for some time yet may be tempted by HSBC's two year discounted variable rate mortgage, which offers an initial rate of 2.29%.

Buyers looking to fix may be more inclined to opt for ING Direct's two year fixed mortgage that offers a rate of 3.14% until 31.08.12, reverting to the providers standard variable rate thereafter (currently 3.50%) and a maximum loan-to-value of 75%.

"Today's figures indicate there is currently some momentum to house purchase lending," said Michael Coogan, director general of the CML.

"But for the sake of the future health of the housing and mortgage markets, the new Government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis.

"The UK is at risk of a chronic under-supply of credit – and the rationing of mortgages for customers – for years to come,"

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