The Average Brit is Spending 19% Of Their Pay On Mortgage Repayments
The average cost of a house in the UK just crashed through the £200,000 barrier, meaning that the average cost of a house in UK has now doubled in the last four years. Roughly put, this means that the cost of an average house in the UK is now rising £100 a day!
Little wonder then that the latest figures released by the Woolwich Mortgage Affordability Research index show that the average Brit is now spending 19% of their take-home pay on their mortgage repayments, up from 18.8% in July. Although part of this rise can be blamed on the recent shock rise in interest rates by the Bank of England, with the average Londoner spending up to 23.5% of their take-home pay on mortgage repayments, Londoner can rightly lay claim to being particularly hard hit if they want to stand any chance of getting on the UK housing ladder.
Mortgage repayments, however, seem to be the least of UK homeowners worries, with recent figures released by a Citizen Advice survey showing that one in ten UK homeowners is not even aware that if they fail to make a repayment on a secured loan or home mortgage loan they stand a real chance of losing their home. More short-term debt, such as UK credit card repayments and car loan payments appear to be of more concern to Britons at the moment.
Together, the findings of the Woolwich and Citizens Advice are confirming a recent trend of bad news for Britons with all the major UK utility suppliers confirming double-digit percentage rises in their prices with effect from this month.
However, Andy Gray, head of mortgages at the Woolwich, added more fuel to the fire of continuing bad news when he said that “with the increase in base rates in August yet to filter through, the cost of borrowing still has some way to go”, and with many senior UK economist now predicting that the Bank of England’s Monetary Policy Committee (MPC) is likely to raise interest rates at least one more time this year to try and keep the UK inflation rate in check, now might be a good to time to question whether we can really afford to let the current trends in the UK housing market continue unchecked. Whatever else you do, however, do not fall in arrears of with your UK home mortgage loan or secured loan as you seriously risk the chance of becoming one of the increasing number of Brits having their home repossessed.
Richard Smith
18th September 2006
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