The CML’s Regulated Mortgage Survey showed FTBs in April were paying 18.7 per cent of their income on mortgage interest – the highest level since 1992. This compared to 18.3 per cent in March and 16.3 per cent in April last year.
get the daily news delivered to your inbox
Home movers were also affected, again facing the highest payments since 1992 at 16.3 per cent. The CML warned that borrowers would see these figures rise further once the May Base Rate increase begins to be reflected in the data.
However, the CML stated it was encouraging that the majority of buyers were opting for the certainty of fixed rates. April saw 88 per cent of FTBs taking out a fixed rate loan, while 72 per cent of movers opted for fixed.
download our news ticker
Overall, fixed rates accounted for 78 per cent of all mortgage loans.
Michael Coogan, director-general of the CML, said: “Month on month we see affordability constraints for FTBs worsening. And with the impact of May’s interest rate rise still to be felt, many borrowers face higher costs in the coming months.
“The vast majority of borrowers will be able to absorb higher mortgage payments. But with two million fixed rate loans coming to an end over the next year and a half, many borrowers should anticipate that their mortgage costs are likely to rise and should be planning ahead.”
find the latest industry jobs
Glenn Lewis, principal for Alexander Financial Services, commented: “If house prices don’t give, the level of peoples’ borrowing and therefore their payments will increase. I think there will be a severe correction in the market. It definitely needs to be brought back down to more manageable levels, as it’s not sustainable.”
