Brits spending 19% of money on mortgages

Wednesday, 06 September 2006 12:00

The average cost of mortgage payments in England and Wales is higher now than it has been for at least four years.

Data released today from the Woolwich shows that the average homeowner in England and Wales pays £546 a month to meet mortgage payments.

This represents some 19 per cent of take-home pay, the highest proportion recorded by the Woolwich mortgage affordability survey since it began in 2002.

What is more, these figures represent the month before the Bank of England's latest decision to increase interest rates by 0.25 per cent.

"Increasing house prices, a buoyant summer market and the higher cost of fixed rates are having an impact on affordability," said Andy Gray, head of mortgages for the Woolwich.

"With the increase in base rates in August yet to filter through the cost of borrowing still has some way to go and it will become increasingly questionable whether another increase in interest rates is needed as the steam already seems to be coming out of the market."

Mortgage costs in August increased in every area of the country except the south-west, where repayments fell 0.2 per cent, and the West Midlands where costs did not change.

The biggest rises in the amount of income spent on mortgages are in London, the north-west and Wales where the proportion of take-home pay spent on mortgages increased 0.4 per cent over the month.

Holborn and St Pancras in London is the least affordable place in England and Wales to own a home - with mortgage payments using up 31.2 per cent of take home household pay.

Outside of the capital, Oxford East is the least affordable area with mortgage payments taking up 26.2 per cent of monthly money.

Staffordshire Moorlands is the most affordable place in the country - with mortgage payments only accounting for 12.9 per cent of take home pay.

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