Despite difficulties in getting new mortgages, those who succeed benefit from the lowest mortgage payments as a proportion of disposable earnings for 15 years.
According to new Halifax research, typical mortgage payments for new borrowers – both first-time buyers and home movers – take up 26% of disposable earnings, as at the second quarter of this year.
The long-term average is 36%.
Overall, mortgage payments have almost halved as a proportion of income over the past five years from a peak of 48% in Q3 2007.
Affordability is better than the long-term average in all regions. Each of the 12 UK regions has seen a marked improvement in affordability since mid-2007.
Average mortgage payments as a proportion of average disposable earnings for a new borrower have fallen most, by two-thirds, in Northern Ireland and nearly halved in Yorkshire & the Humber, and Scotland.
In Northern Ireland and Scotland, mortgage repayments as a proportion of disposable earnings stand at 20%, and at 21% in Yorkshire & the Humber.
Payments are highest in relation to earnings in Greater London (35%), the South-East (32%) and the South-West (32%).
.png)
%20A%20property%20tale%20for%20our%20times.png)
Comments
Why don't the government and Bank of England get their heads together and announce some big new lending scheme, or did they try that already in the last few weeks?
Affordable? Maybe although the maths is suspect because of ratios and price changes.
Mind you the advertised APR is wildly different from the AER - I saw one with such high booking and arrangement fees that they were advertising 1.something and it worked out over a 2 year period that it was equivalent to nearly double the advertised rate. THIS SHOULD BE ILLEGAL.
Worse though I think is availability.
As far as I can tell, the banks only want to lend money to cash buyers...
Nationwide have just announced that they are upping their rates too...
Beat me to the punch Henry - of course they are at their most affordable - if yoiu can get one.
Santander is increasing it's basiv variable rate from September by 0.5% wonder how affordable their existing borrowers will find that!!
No, no, no! These numbers are based on NEW borrowers who now have to stump up a 25% deposit & so borrow less than the 95% they borrowed in 2007 and do so at record low interest rates to buy homes that typically cost 19% less -according to Halifax own House Price Index.
Of course they are more affordable - surely the problem is they aren't more accessible!