You are here: Home - News -

Mapped: Interest-only mortgages form 20% of homes in parts of South East

by:
  • 03/05/2018
  • 0
Mapped: Interest-only mortgages form 20% of homes in parts of South East
Interest-only mortgaged properties form up to 20% of dwellings in some pockets of Britain, according to Financial Conduct Authority (FCA) data obtained by a freedom of information request.

 

The highest proportion of residential interest-only mortgages are on homes located in the South East, a map of the data by Residential Analysts showed.

In a number of areas surrounding the capital, 12% or more of homes are on the products, which were widely available in the run-up the to the financial crisis.

In the town of Radlett in Hertfordshire it was found that around 20% of properties are on interest-only mortgages.

Some of the highest proportions of the deals are in holiday home hot spots – although the data does not include buy-to-let mortgages.

Neal Hudson of Residential Analysts, who put together the map, said: “Although interest-only is frequently viewed as a problem for more stretched households, the map shows that they are also regularly used by people living in higher priced areas or second home hotspots, perhaps as a useful tool to optimise their finances.”

 

interest-only mapped

 

After the financial crisis, lenders put heavier restrictions, such as minimum incomes or equity, on the use of interest-only mortgages.

London & Country associate director, communications David Hollingworth said: “It’s interesting to see how the level of interest-only use varies regionally and although there are exceptions there is generally greater use in the South East.

“For newer borrowers that might be expected as lenders have put an accent on interest-only of it being a higher net worth product.

“Some providers will have a minimum loan and/or income requirement on interest-only which will therefore make it a product more widely available to higher earners.

“More historical lending will not necessarily have been subject to those requirements though and could be a by-product of high prices and borrowing requirements.

“Despite the fact that price growth may also have been more significant it doesn’t remove the need for borrowers to ultimately repay the capital,” he added.

There are 0 Comment(s)

You may also be interested in

  • RT @OTJournalist: Eastgate to join Shawbrook as MD of commercial mortgages operation. He's spent more than six years at OSB. https://t.co/y…
  • RT @specialistsols: Buy to let remains an important sector, but has become increasingly specialist in recent years. What are the key comple…
  • RT @dontdelay: Very proud to receive this, and have something tangible to discuss with my children about giving blood. Thank you @GiveBlo

Read previous post:
Exclusive: Barry Searle appointed MD mortgages at Castle Trust

Castle Trust has announced two senior management changes including that chief operating officer Barry Searle will become managing director of...

Close