Anyone who can get on the housing ladder has (almost) never had it so good, according to new lending figures out this morning.
The Council of Mortgage Lenders (CML) says the debt burden for first-time buyers is the lowest for five years while home movers are enjoying the best conditions since 1996 and the second best since records began in 1974.
Existing owners buying a new home typically needed just 10.6% of their gross income to cover their mortgage in November 2009, down from 11.1% in November. That compares with 10.2% in mid-1996 at the bottom of the 1990s slump in house prices.
First-time buyers needed 14.4% of their gross income, down from 15.1% in October and the lowest since May 2004.
The improvement is the result of the big fall in mortgage rates and a small improvement in incomes and came despite the fact that average house prices and mortgage advances have been rising since February.
Overall lending was down slightly on October but up by two thirds on November 2008.
Which sounds like great news if you can get on the housing ladder but not so good if you can’t. Some 19,300 first-time buyers got a loan in November compared to 11,900 a year ago and a low of 8,600 in January.
However, that’s still half the number seen in early 2007. True, the fall is most marked in the riskiest sounding mortgages - interest-only with no repayment specified made up 22% of the market in mid-2007 but just 7% now - but it is also part a longer-term disappearance of first-timers since the early noughties, when more than 40-50,000 a month were getting on to the ladder.
Ultra-low interest rates may have bailed out existing home owners - though their debt burden will rise rapidly if rates increase - but with banks only willing to offer average 75% mortgages the market looks less accessible than ever for those locked out.
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