Thursday, 24 April 2014

Mortgages agreed at 10 times salary

Nearly 80,000 mortgages for homes worth more than eight times the borrower’s salary were agreed at the height of the property boom.

Figures compiled by the Communities and Local Government department show 79,796 mortgages were agreed on homes worth more than eight times salary in 2007, accounting for 7.9 per cent of all mortgages.

Nearly half of those were on properties worth more than 10 times the borrower’s salary.

The majority of loans agreed were on homes worth six times salary or less, at 80.6 per cent, and the remaining 11.5 per cent were for homes worth between six and eight times salary.

The figures are estimates produced by CLG from Council of Mortgage Lenders data in response to a written question in Parliament.

A spokeswoman for the CML said: ‘The average ratio in 2007 was 3.16 per cent, so you can see the vast majority of lending has been on relatively conservative terms.’

She added that the ratio tightened in 2008 to 3.06 as lenders responded to the economic slowdown.

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