18
Jun
CML: Profile of borrowers changed after credit crunch
The Council of Mortgage Lenders (CML) has suggested that the
"profile" of mortgage borrowers has altered in recent months as a
result of the credit crunch.
It noted that affordability would appear to have improved in April
for new mortgages, as first-time buyers put down the highest
deposits in over three years and took out loans for 3.3 times their
income, the lowest level since November 2006. The average
home-mover loan was also at its lowest level proportional to income
since July 2006.
However, the organisation stated that this does not necessarily
mean affordability has got better. Rather the "profile of borrowers
has changed" as demand for mortgages outstrips supply of funding
and fewer people are able to secure loans.
"By tightening lending criteria, lenders are selecting less risky
borrowers, who have larger deposits and want to borrow less
relative to their income," the CML commented.
A survey released yesterday by Moneyfacts revealed that the cost of
mortgages has risen to its highest level in a decade.
