by Mark Johnston
There is no doubt in anyone’s mind that the economic climate was and still is difficult, however consumers are generally more upbeat today than they were back in 2008.
Rock bottom interest rates enabled mortgage lenders to offer some of the best deals ever.
Research has shown that while the housing market is undergoing a difficult time at the moment, those who are already on the property ladder are faring much better than those yet to climb on to it.
According to Barclays bank, mortgages in 2011 were the ‘most affordable’ in a decade, with lenders offering some of their cheapest mortgage deals. Some mortgage commentators believe that in general lenders seem to be becoming more comfortable with lending than in previous years.
Research which was commissioned by Barclays, found that the majority of home owners that participate in the study were more comfortable with their current mortgage payment levels, compared with the same time in 2010.
The mortgage repayments for home owners in the UK last year were shown to be lower than they have been at nay time over the past 10 years and this is in part thanks to lenders reducing their charges.
Data shows that monthly mortgage repayments were just 15.2% of the average salary in the UK, this is compared to 2008 when they reached their highest ever recorded at 20.5% of the average salary. Mortgage payments in England and Wales averaged £494 a month in 2011.
The continued low interest rates have helped to make monthly mortgage payments the most affordable for first time buyers in nearly 8 years, however many lenders have stated that in October 2011 10% fewer home loans were given to first time buyers than in previous months.
However, Conor Murphy, managing director of Capricorn finance stated that “all of the major lenders we deal with have indicated that they are looking to at least match current lending levels in to 2012 and the majority are also looking to increase their lending levels”.
Although with an interest rate rise on the back of most borrowers mind it seems that many have a plan already in place to cover this when it does eventually happen.
This particular research from Barclays has also found that 83% of home owners have room for manoeuvre with in their mortgages should their circumstances change or if the interest rate was to rise suddenly.
Surprisingly however, when asked about budgeting for 2012 the top 3 concerns for most home owners were:
– energy bills
– the cost of running a car
– the cost of food bills
Even though it is widely believed that interest rates are unlikely to start to rise until at least 2013, many financial experts urge home owners to not be complacent with this affordability and to act early on in 2012 to secure good mortgage deals, as they may be able to cut their monthly mortgage payments further.
The Bank of England predicts that lenders will increase their mortgage ranges further, but did caution that this would be offset by tougher lending rules.
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