CML: Repayment mortgage popularity helped by regulations

Date:Monday 13th September 2010
Author: Susanna Kavka

A representative from the Council of Mortgage Lenders (CML) has suggested full repayment products are becoming more prevalent thanks to the prospect of government legislation.

Economist at the organisation Paul Samter explained that the Financial Services Authority (FSA) is poised to make regulatory changes that limit the availability of interest-only mortgages.

As a result, full repayment deals are becoming more popular, with CML repayment mortgage statistics showing 90 per cent of first-time buyers, 72 per cent of home-movers and 70 per cent of remortgagers opted for this type of arrangement in July.

"More generally, lending criteria remain tight, underpinned by caution on the part of both borrowers and lenders in the light of continuing economic uncertainty," added Mr Samter.

Lending figures show the number of loans for house purchases increased from 52,000 in June to 56,000 in July this year.

Last week, a CML representative suggested regulatory changes relating to interest-only products could make home-buying more costly for many consumers and restrict choice.