Average mortgagors salary falls to £35k
The typical salary fell by 16% year-on-year to £34,584 in June. A borrower taking out a mortgage now would typically save £780 on repayments compared to a year ago.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Borrowers have been the winners in the mortgage market over the past 12 months. Although some lenders may initially have been over-cautious following the introduction of the Mortgage Market Review, a number have since adapted to the rules and become more flexible in terms of affordability.
“At the same time, mortgage rates have plummeted, leaving borrowers with cheaper monthly bills and making homeownership a more affordable prospect.”
The typical applicant put forward a deposit of £75,625 in June, up from £71,474 in the same month last year. Typical loan-to-values also fell from 69.8% in June 2014 to 69.2% last month.
In the past month the number of products available through intermediaries rose by 2.3% to 9,602.
Despite the positivity, last week the Governor of the Bank of England Mark Carney said a rate rise is moving closer, indicating that it could happen at the turn of the year.
Murphy suggested that borrowers take stock and take out a long-term fix.
He added: “A rise of just 0.5% could still bring mortgage bills back up to where they were a year ago.
“For those who are concerned about the future trajectory of mortgage rates, locking in to a long-term fix is a good way of ensuring stability of repayments.”