Families hit by mortgage rate hike

Families hit by mortgage rate hike

Monday 16 April 2012

Mortgage rates

Young families looking to get their foot on the property ladder were hit by increased mortgage costs in February as lenders hiked up their rates, official figures show.

The amount of cash paid out in mortgage interest payments by first-time buyers increased from 12.1% at the start of the year to 12.5% the following month - rising for the first time in ten months.

This has come as a huge burden to the finances of young mothers and fathers seeking their stake in the property market.

The Council of Mortgage Lenders (CML), who released the figures, has been quick to remind buyers this figure compares favourably to four years ago, when payments averaged 19.6%Records show that first-time buyers took out 14,100 loans in February, totalling £1.7 billion.

Demand is thought to have been pushed up by the end if a stamp duty concession for first-time buyers, which was scrapped at the end of March.

CML director general Paul Smee said: "It is encouraging to see the continuing year-on-year improvement in house purchase lending.

"However it is not yet clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the Government's NewBuy scheme, available to all buying a new build property."

Copyright Press Association 2012

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