Homebuyer loans drop 50% in a year

The number of loans taken out to buy property stood at 47,000 in June, less than half the 98,000 loans taken out in June 2007.

The number of first time buyers taking out mortgages fell by 8% from May to 18,100 in June, compared with 33,800 in the same month last year, the Council of Mortgage Lenders said today. Fewer people borrowed to move home, with 29,100 loans taken out in June, a fall of 9% since May.

Tighter lending conditions saw people putting down larger deposits in June. The average homebuyer paid a deposit worth 22% of the purchase price, up from 20% in May.

Buyers borrowed smaller multiples of their income too. The average first time buyer borrowed 3.33 times their income, down from 3.35 times in May. The average home mover borrowed 2.94 times their income, compared with 2.97 in May.

Gross lending was £23.6bn, 4% lower than in May and a drop of 32% compared with June last year. The largest chunk of lending was for remortgages, with 75,000 loans, 44% of mortgages, borrowed by people staying put.

 

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