Mortgages are at most affordable level in more than four years

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New figures from Halifax reveal that mortgage payments in the UK have risen to their most affordable level in more than four years, in the last three months of 2017. Halifax compiled the figures using the Bank of England and Office for National Statistics (ONS). 

The data found that typical mortgage payments accounted for less than 29% of all homeowners’ disposable income towards the last quarter of 2017. This figure was compared to that of 2007 which was nearly 48%. Interestingly, 29% of homeowners’ income spent on mortgages is driven by historically low mortgage rates; even though the first base rate rose in more than a decade back in November 2017. Moreover, 29% was also the lowest figure on record since the second quarter of 2013, when statistics had shown that mortgage affordability was 26.3% of disposable income for homeowners. This was also the lowest percentage at the time in a decade. 

It must be noted that these facts and figures researched by Halifax are based on mortgage payments for a new borrower; so, a first-time buyer and home movers. Halifax also considered using the average house price and mortgage rate for a prospective buyer who had a 30% deposit. Halifax commented on the findings claiming that the fact mortgage payments take up around 29% of wages, is surprisingly below the long-term average of 35%. 

It was found that while mortgage payments are at their lowest as a proportion of a disposable incomes in Northern Ireland (19%), Scotland and the North-East (20%), Yorkshire and the Humber and the North-West (23%), unsurprisingly, the highest payments were recorded in London (45%), the South-East (40%), and the South-West (34%). 

Photo credit: g-stockstudio/Shutterstock 

Here is the full breakdown of regions, illustrating mortgage affordability according to Halifax: 

• North-east, 20.6 per cent
• Yorkshire and the Humber, 23 per cent
• North-west, 23.1 per cent
• East Midlands, 26.9 per cent
• West Midlands, 29.0 per cent
• East Anglia, 28.4 per cent
• South-west, 33.8 per cent
• South-east, 40.2 per cent
• London, 44.8 per cent
• Wales, 24.8 per cent
• Scotland, 20.1 per cent
• Northern Ireland, 18.8 per cent

These are the top 10 most affordable areas according to Halifax’s findings:

1. Copeland, North-west, 14.9 per cent
2. Inverclyde, Scotland, 15.7 per cent
3. North Ayrshire, Scotland, 15.9 per cent
4. West Dunbartonshire, Scotland, 16.2 per cent
5. Renfrewshire, Scotland, 16.4 per cent
6. East Ayrshire, Scotland, 16.6 per cent
7. Pendle, North-west, 16.6 per cent
8. Burnley, North-west, 16.7 per cent
9. Hyndburn, North-west, 16.7 per cent
10. Barrow-in-Furness, North-west, 16.9 per cent

And here are the 10 least affordable areas according to Halifax:

1. Brent, London, 61.1 per cent
2. Haringey, London, 60.5 per cent
3. Harrow, London, 57.7 per cent
4. Elmbridge, South-east, 56.3 per cent
5. Hillingdon, London, 56.2 per cent
6. Ealing, London, 55.7 per cent
7. Islington, London, 55.1 per cent
8. Barnet, London, 55.0 per cent
9. Hackney, London, 54.9 per cent
10. Chichester, South-east, 54.0 per cent

Photo image credit: GagliardiImages/Shutterstock 

Feature image credit: LifeTimeStock/Shutterstock