Friday, 19 April 2019

London mortgages are UK’s least affordable

London mortgages are UK’s least affordable

LONDON mortgages are at their least affordable level for a decade, according to new research by the Halifax.

Across the UK, however, mortgage affordability has remained at or just below 30 per cent of average disposable earnings since 2009.

East Anglia and London had the largest reductions in affordability, while Northern Ireland and Scotland saw some of the biggest improvements.

London mortgages have become increasingly less affordable since the financial crash — but remain below the 2007 peak, when mortgage payments were over half of earnings at 52.4 per cent.

Over the past decade, the capital’s average mortgage payments, as a proportion of disposable earnings, have risen by 18 per cent — up from 40 per cent in 2008 to 47 per cent today.

By contrast, the cost of maintaining a mortgage in Northern Ireland now only takes up half of average earnings — 19 per cent compared to 39 per cent in 2008. Scotland is not far behind at 18 per cent now compared to 30 per cent in 2008.

Mortgage payments remain low as a proportion of disposable earnings in the north of England at 20.8 per cent, Yorkshire and the Humber at 22.6 per cent, and the North West at 22 per cent.

The 10 most affordable localities are all in northern England and Scotland, while the 10 least affordable areas are in London and the South East. Scotland and the North West have some of the 10 most affordable local authority districts in the UK — Copeland in Cumbria, for example, is the most affordable, where typical mortgage payments account for just 13 per cent of average local earnings.

West Dunbartonshire in Scotland, Barrow-in-Furness, Burnley and Hyndburn follow Copeland in the affordability rankings.

Brent and Haringey are the least affordable places in the UK, with average mortgage payments on a new mortgage loan accounting for 68 and 65 per cent of disposable earnings, followed by Hackney at 61 per cent and South Buckinghamshire at 60.5 per cent.

Andy Bickers, mortgage director at Halifax, said: “Despite rising house prices and interest rates, average UK earnings have also risen in line, meaning that national affordability has remained broadly flat. This is good news for first-time buyers, homeowners and a boost to the housing market.”

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