It is either long or short for mortgage tenures

London: Demand for mortgages in the UK is increasingly shifting to higher earners under tougher affordability constraints for home loans, research has found. Those seeking a mortgage to buy a home in the three months to September 2014 had an average combined income of £56,559 (Dh331,119), up 21 per cent on the same period last year. Using data from over 250,000 online searches for home loans, the study by broker Mortgage Advice Bureau and technology company Mortgage27 also found borrowers were choosing both longer and shorter repayment terms over medium term lengths.

The broker said this polarisation effect was explained by the new rules on affordability: as younger buyers wanted to borrow more, they sought longer term lengths. But for older borrowers closer to retirement and a reduction in income, lenders were more reluctant to spread loans over a longer period.

Brian Murphy, head of lending at Mortgage Advice Bureau, said the more stringent affordability assessments introduced in April had “shone a spotlight” on the detail of borrowers’ incomes and expenditure.

“As a result, it may have dampened some speculative interest from lower earners, and while there is still plenty of appetite from prospective purchasers, it is important the industry continues to work hard to promote affordable options such as shared equity and shared ownership to maintain access to the property ladder.”

— Financial Times