The Council of Mortgage Lenders (CML) says mortgage spending reached an “historic low” in September as rates fell in the wake of the Brexit vote.

It reported that home movers and first-time buyers benefited after the Bank of England cut the base rate of interest to 0.25% in August amid fears the economy would grind to a halt after the shock Leave win.

The CML said its members had responded by trimming many of their own rates, with mortgage repayments for those climbing the property ladder typically taking up 17.7% of their monthly household income in September.

The figure for first-time buyers was 17.8%. The figure includes capital and interest repayments.

Low interest rates have been a feature of the market ever since the financial crisis, though soaring house price growth has raised deposits and stamp duty costs.

Official figures released by the Office for National Statistics showed average house prices rising by 7.7% in the year to September – rising 0.2% month-on-month.

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It meant prices were about £16,000 higher on average in September this year than they were in September 2015, while a first-time buyer faced paying 7.5% more for a home than they did a year ago.

But Paul Smee, the CML’s director general, said low rates “should help turn strong appetite for home ownership into a reality as we approach the closing months of the year”.

More recent housing market studies have pointed to high demand for properties but too few homes being built or being put on the market – driving asking prices up.

The CML’s figures showed homeowners borrowed a total of £11.4bn for house purchases in September, up by 4% year-on-year.

Sky News – 15 November 2016

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