The average house price has almost trebled since 1996 and demand for property shows no real signs of diminishing, with some commentators predicting further increases of up to 40 per cent in the next four years due to shortages in housing supply.
Moneyfacts carried out some comparisons of current economic data and mortgage data with the equivalent statistics from 10 years ago and found the fact that Mortgage Interest Relief at Source (MIRAS) is no longer available is a key factor in the cost differential. But more influential is the fact that average salaries (from mortgage applicants), whilst they have doubled in the last decade, have been far outstripped by house price increases.
Andrew Hagger, head of news and press at Moneyfacts.co.uk, comments: “The net effect is that mortgage payments take a much bigger chunk of our income than they did in 1996. This statistic looks gloomy enough in its own right, but when you factor in additional increased expenses such as higher council tax and utility bills, it is no surprise that the UK is now faced with the current personal debt crisis.”
