Housing affordability for people with new mortgages reached its worst level for 15 years in October as borrowers had to spend significantly more of their income on mortgage costs than they did at the start of this year. Financial Times

The Council of Mortgage Lenders yesterday said first time buyers spent 20.6% of their income on mortgage interest in October, up from 20.4% the previous month and 17.8% in January.

Home movers paid out 17.6% of their income to cover mortgage interest in October, compared with 15.6% at the start of this year.

The CML’s latest data showed that total lending had so far remained robust – but this reflected still high house prices and the large numbers of mortgages granted before the full effects of the credit squeeze were felt.

Mortgage approvals have fallen sharply in the past two months and lending is expected to slow as a result. Mortgage approvals were down 16.5% year-on-year in October, according to Global Insight economists.

Total mortgage lending was £33.5bn in October, up 9% compared with September. Loans for house purchases edged back up to 89,200 after falling markedly in September.