Credit ratings company states home buyers in south have more debt

June 7, 2016 by Brendan O'Neill

Borrowers

According to research conducted by Moody’s Investor Service, home buyers located in the south are likely to have more debt.

The credit rating agency found that buyers in the south who have bought a property during the last two years, will typically have more debt compared to their northern counterparts. The study revealed that those in the south would borrow as much as 30% more, in comparison to their income, even though workers down south have higher levels of income.

The report indicates that southern buyers are struggling, especially first time buyers who are more likely to have a higher loan to value ratio than those in the north, where it is 23% lower. It also discovered that borrowers across the UK are borrowing for longer terms, so that they can reduce monthly payments. People living in London were found to enter the property market much later than others in the UK, with Londoners struggling to save a deposit and taking far longer to close a deal.

Home owners in the south also spend more of their income on mortgage payments. Loans taken out by 70% of first time buyers will be worth 3.5 times their annual income. As house prices continue to rise, buyers are more likely to be refused a product due to increased risk and higher loan to value ratios.

Mortgage advisers who have studied for the CeMAP training will have an improved knowledge of all the products and their interest rates.