Mortgage Lending Still Difficult for First Time Buyers

The share of first time buyers in mortgage lending remained low in July this year. Only 34% of the whole mortgage loans accounted for the first time buyers, according to the Council of Mortgage Lenders (CML).

In July, there were 56,000 mortgage loans advanced to home buyers. This was about 7% increase over the previous month which showed only some seasonal change, but in general the housing market remained very weak due to strict lending conditions.

Mr. Paul Samter, economist, CML said that in the period of continuing economic uncertainty, lending criteria remained very tight.

A first time buyer needed an average deposit of 24% in July and for availing loans the low interest rates helped them much. Many first time buyers said that they sought financial help from their parents to acquire their deposit for loans.

The average deposit was 21% in May and June this year, there was also slight dip in demands probably due to tight lending criteria.

In June this year, the first time buyer’s share of mortgage loan was 38%, and since the middle of 2007, it declined to the present low level of 34% in July this year, just before the starting of credit crisis and word banking crisis.

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