Homebuyers will be happy to learn that getting a mortgage is now easier as the mortgage affordability rules have been relaxed. Our estate agents in Newham know that many property buyers have been struggling to find a home and a mortgage that will fit their budgets and welcome this decision of the Bank of England. The decision to relax mortgage affordability rules should now make it easier especially for first-time buyers to access the property ladder.
Here are the key points to know about the updated mortgage affordability rules:
- The mortgage affordability guidelines were first introduced in 2014 to protect the banks from re-living the 2008 crisis.
- The Bank of England has decided to relax the rules applicable to mortgage lending starting August 1.
- Our estate agents in Newham consider this decision beneficial especially for first-time buyers and homeowners who have a mortgage that covers a high percentage of their income.
- Until now, the average buyer was able to take out a mortgage worth about five times their income if their stress test rate was 6.6% and four times their income if the stress test rate was 9.5%. This caused many to be priced out of buying a home.
- As of August 1, buyers will no longer have to show they can afford to cover the repayments if the mortgage interest rate increases by 3%.
- According to our experienced estate agents in Newham, current house prices and rising mortgage rates are making it very challenging to access the property ladder. Therefore, the Bank of England’s decision comes at the right time for many buyers.
- The Bank of England made this decision because keeping this rule in place would make it virtually impossible for many people to take a home loan.
If you are a first-time buyer or a property investor, our estate agents in Newham are the partner you need to find the ideal home and close a successful deal in the shortest time. Contact us to today at 0207 055 0441 or info@realestateagentslondon.co.uk.
