- 12
- Jun
Figures from the Council of Mortgage Lenders (CML) have indicated a record amount of consumers’ income is being spent in mortgage interest repayments.
The study revealed that payments accrued on home and secured Loans accounted for some 18.7 per cent of first-time buyers’ income over the course of April – the highest proportion since 1992.
This rise in payments was attributed to the effect of Bank of England interest rate increases which in turn impacts upon consumers’ abilities to make secured and home loan repayments.
Director general Michael Coogan said: "Month-on-month we see affordability constraints for first-time buyers worsening.
"And with the impact of May’s interest rate rise still to be felt, many borrowers face higher costs in the coming months."
He added that although many borrowers will be able to manage an increase in mortgage costs, those coming to the end of fixed-rate loans over the coming month were advised to prepare for any consequent rise to their homeowner loan costs.
Earlier this week, managing director of Paragon Mortgages John Heron claimed there is "a healthy appetite for bricks and mortar" despite interest rate rises impacting upon consumer affordability.
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