High interest rates hit first time buyers

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) November 17, 2007 -- London (online-unsecured-loans) November 15, 2007: The figures from the Council of Mortgage Lenders show that an average first time buyer is spending 20.4 per cent of his monthly income on mortgage interest payments. This figure is the highest since 1991.

The figures also show that there were few loans given out to the first time buyers in September. First time buyers got 28,400 home loans in September as against 34,800 in August this year. The affordability has suffered due to high interest rates and increased home prices. In the last few months, lenders have tightened their loan conditions and increased the rates on unsecured loans and mortgages.

Meanwhile, the Bank of England’s assessment of economic impact due to credit crunch was presented in its quarterly Inflation Report. The Bank said that the growth would decline sharply to just over 2 per cent next year even if it declines its base rate from 5.75 percent. There are strong possibilities that the Bank would follow the U.S. Federal Reserve in lowering interest rates because of this summer's credit squeeze.

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