By Cheryl Tay:
Despite a credit squeeze, mortgage payments in the UK are expected to become more affordable in 2013, according to the Global Market Outlook for Housing and Mortgage Lending by ratings agency Fitch.
The report stated that UK’s debt-to-income ratio has improved and is expected to remain favourable this year.
“Mortgage affordability has improved markedly since 2007 despite the continued downward forces on real wages.”
The sizeable improvement in loan affordability is attributed to historically low interest rates and cheap home prices which are a far cry from their pre-crisis levels.
“However, while affordability in general terms is good, access to credit remains relatively limited at higher LTVs and imperfect credit history.”
Nonetheless, affordability in terms of house price to GDP per capita ratio remains stretched. Although gross new mortgage lending is expected to remain stable this year, the country will still need over 200,000 additional houses each year over the next 20 years, added the report.
Cheryl Tay, Editor of CommericalGuru, wrote this story. To contact her about this or other stories, email cheryltay@propertyguru.com.sg
Related Stories:
US mortgages still near record lows
HK’s hot market could impact home loans
US housing activity to heat up