First-time buyer affordability changed fractionally in February, with first-time buyers typically borrowing 3.37 times their gross income, compared to 3.38 in January. The typical loan size for first-time buyers decreased month-on-month to £124,000 in February, down from £124,700 in January. The typical gross income of a first-time buyer household changed slightly to £38,500 in February from £38,456 in Janaury.
First-time buyers in February paid 19.0% of gross income towards covering capital and interest payments, little changed from 19.2% in January but still significantly less than the recent peak of 24.8% in December 2007.
Paul Smee, director general of the CML, commented:
"As with January, seasonal factors have played their part in dampening house purchase lending activity in February. This typical seasonal trend may also be exacerbated by uncertainty ahead of the general election, but we still expect to see an upturn in the spring and summer months. Buy-to-let, in contrast, has shown year-on-year lending increases, due almost completely to remortgaging which is typically strong in the buy-to-let market.
"We this month launched the CML buy-to-let statement of practice which reflects what responsible lenders already do and offers a clear explanation of how buy-to-let lenders operate. We hope it will help in people's understanding of the buy-to-let lending environment and the transparency of the statement of practice can give confidence to landlords that clear and consistent lending policies are being undertaken."
