July 22, 2010 | Author

Author Julie Hanson

Mortgage rates are currently at their most affordable in 35 years, according to new figures.

The Council of Mortgage Lenders (CML) has reported that new homeowners in May only spent 9.5 per cent of their income on interest payments.

In May 2009, mortgages accounted for around 11.4 per cent of income for the average homeowner.

In addition, lending has risen for the 11th month in a row, with total lending at around £4.2 billion in May.

This is an increase from £4.1 billion in April.

Despite the increased activity, the CML forecasts that lending will come down in next six months because of the impact of tax rises and budget cuts.

Commenting on the new figures, the organisation’s general director Michael Coogan said: “Activity picked up in the second half of 2009 due to the stamp duty holiday but with the government’s austerity drive picking up momentum we are unlikely to see a repeat of those buoyant numbers this year.

“Our forecast for gross lending in 2010 may now be looking a little optimistic.”

Posted by Luella Ravelin