Housing market cooling, says CML

The latest information from the Council of Mortgage Lenders suggests the housing market is beginning to cool, due to recent rises in interest rates.

Levels of mortgage approvals for house buyers are currently 15% below the levels seen last year. Approvals are at the lowest level since last April.

A report released by the Council of Mortgage Lenders said: “The fall in buyer interest has been greatest amongst first time buyers, where numbers are down 4% on a year ago. Making the first step on the property ladder has become increasingly difficult.

“A typical first time buyer is now borrowing 3.3 times their income and faces levels of mortgage interest payments relative to income last seen in the early 1990s.”

The report also predicted that a further increase in interest rates may be on the cards: “The underlying level of mortgage approvals for house purchase is likely to continue to moderate until it becomes clear that the level of interest rates has peaked. We are not yet at that point.”

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