British borrowers turn to repayment mortgages

Britons have changed their mortgage tastes over the last decade, with two thirds of borrowers (64 per cent) now with repayment loans and just a quarter (27 per cent) with an interest-only home loan, new data shows.

The Council of Mortgage Lenders (CML) claims that mortgage borrowers are responding to endowment shortfalls by switching to repayment loans, with almost three-quarters of mortgages taken out since 2001 repayment loans and just eight per cent endowment products.

The latest findings from the Survey of English Housing (SEH) reveal that first-time buyers are continuing to experience difficulties entering the property market, with 40 per cent of those aged under 30 renting their home and just 36 per cent buying with a mortgage. Four years ago more under-30s were buying their home than renting.

The number of households in England has soared above 20 million, as an increasing number of people live on their own. Homeowners are more likely to have extra space than renters and only 1.4 per cent of owner-occupiers are overcrowded, compared with 2.5 per cent of all households.

The number of homes with children has fallen over the past 25 years with just 29 per cent of households with dependent children. More than four in five (81 per cent) couples with children own their own homes, while 45 per cent of lone parents with children are housed in the social sector, with just 37 per cent owning their house.

Those households in the social rented sector had the lowest median income of around £7,800 a year during 2004/05, while the median income of those buying with a mortgage was £33,800 and £18,200 for those households that owned their property outright.