Mortgage affordability across the UK has remained at or just below the 30% of average disposable earnings since 2009. Over the past decade,Londonaverage mortgage payments, as a proportion of disposable earnings have risen by 18%, from 40% in 2008 to 47% today, driven by house price increases.
London mortgages have become increasingly less affordable over the past decade,butremain below the 2007 peak when mortgage payments were more than half (52.4%) of earnings, Halifax has found.
Mortgage affordability across the UK has remained at or just below the 30% of average disposable earnings since 2009. Over the past decade,Londonaverage mortgage payments, as a proportion of disposable earnings have risen by 18%, from 40% in 2008 to 47% today, driven by house price increases.
Andy Bickers, mortgage director at Halifax,said:“Despite rising house prices and interest rates, the 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.”
Typical mortgage payments accounted for over a quarter (28.8%) of homeowners’ disposable income in 2018. This means mortgage affordability levels for home movers have improved significantly by 39% since 2008 (35%).
East AngliaandLondonhad the largest reductions in affordability while Scotlandand theSouth Eastsaw the biggest improvements in affordability, with mortgage payments dropping 9% as a proportion of average disposable earnings.
Mortgage payments remain low as a proportion of disposable earnings inNorthern Ireland(19.3%),Scotland(18.2%), theNorth(20.8%), Yorkshire & the Humber (22.6%) and theNorth West(at 22%).
The payments are the highest inGreater London(46.8%), theSouth East(38.8%) andSouth West(34.1%).
The 10 most affordable local areas are all in northern England and Scotland, whilst the 10 least affordable areas are all in London and the South East.
Scotlandand theNorth Westhave a share of the 10most affordablelocal authority districts in the UK.
Copeland in Cumbria is the most affordable, where typical mortgage payments account for 13% of average local earnings, followed by West Dunbartonshire inScotland, Barrow-in-Furness Burnley and Hyndburn in theNorth West.
The 10 least affordable areas are predominantly inLondonand theSouth East.Brent and Haringey are the least affordable places in the UK with average mortgage payments on a new mortgage loan, accounting for 61% of average local disposable earnings, followed by Hackney (61%) and South Bucks (60%).
