With house prices predicted to grow by over 6 per cent in 2007, a number of experts have urged the government to do more to help aspiring FTBs onto the property ladder.
Peter William, executive director at the Intermediary Mortgage Lenders Association (IMLA), admitted that mortgage lenders were innovating in order to help those struggling to get onto the property ladder. He said: “Lenders are doing a lot more than the government to help FTBs. The government’s contribution towards affordability solutions is tiny. The costs facing FTBs have continued to rise.”
Christopher May, director at The Mortgage Times Group, admitted that affordability based lending had helped FTBs. He explained: “The old approach, of 3.5 times income is archaic. There has been a lot more innovation and lenders changing the term length of their mortgage products. Interest only mortgages also have their uses for getting people onto the property ladder.”
However, Chris Pearson, head of sales and marketing at BM Solutions, issued a word of caution when dealing with interest only mortgages. He said: “Mortgage intermediaries need to ensure that their record-keeping is in order, especially if they make a recommendation for an interest only product.”
