New research has found that mortgage payments account for less than a third of a homeowner’s disposable income, with mortgages reaching their most affordable level since 2007.
The recent research from Halifax has shown that during the fourth quarter of 2017, the average mortgage payments in the UK accounted for 29% of the owner’s disposable income.
When the same statistic was recorded in 2007, monthly mortgage payments took up 48% of disposable income, meaning there has been a 40% fall in mortgage affordability levels for home buyers since the peak seen in 2007.
According to Halifax, record low mortgage rates are responsible for the improving affordability levels as average rates dropped from 2.09% to 1.98% across last year.
Just under 75% of all the districts included in the study recorded an improvement in affordability of at least 15% over the last 10 years and 35 districts saw mortgage payments fall by at least 30% over the same period.
As a result of the considerable fall in house prices, Northern Ireland saw the greatest improvements in affordability, currently standing 44% lower than 2007.
Within the UK, the North West and Scotland had the most frequently listed areas in the top 10 most affordable places to live, with the South East and London dominating the other end of the table.
The research found that Brent and Haringey were the least affordable places to live, with mortgage payments taking up 61% of disposable income on average. At the other end of the spectrum, the findings showed a considerable difference when compared to such areas as Copeland, Cumbria, where only 15% of disposable income is used for mortgage repayments.
Mortgage Director at Halifax, Andy Bickers, commented on their findings, saying that whether you’re a first-time buyer or already a homeowner, these latest statistics are good news “This is a real boost for both those who already have a mortgage and those preparing to take their first step on to the property ladder. Improved mortgage affordability has been a key factor supporting housing demand and helping to stimulate the modest recovery that we are currently seeing.”
"In recent months we have seen the number of first-time buyers and homemovers purchasing a home with a mortgage bounce back towards 2007 levels, and mortgage payments becoming a much smaller proportion of disposable income across most of the country will also support a healthy market with more choice and opportunity for buyers/borrowers.”
