Data from the CML showed the average amount of monthly income now spent on mortgage repayments was at 18.3 per cent – its highest level since 1991.
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Meanwhile, Woolwich claimed the percentage was even higher if taken across the board, with 19.9 per cent of monthly take home pay on average going on repayments – an equivalent rise of £78 a month on this time last year.
Andy Gray, head of Woolwich Mortgages, said: “Mortgage borrowers are really being squeezed. With the costs of council tax, petrol, food and drink, as well as mortgages all increasing, consumers are seeing a large chunk of their earnings being diverted to essentials, putting real pressure on disposable income.”
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However, despite the increasing drain on income, the level of borrowing recorded by the CML only increased slightly, with the average income multiple up 0.01 times on February and 0.16 times on March 2006.
Daniel Clayden, director of Clayden Associates, said the affordability picture was concerning: “As with all averages, you are going to get variances but you need to look deeper. Many people will be remortgaging and they will have lower loan-to-values and multiples, which will bring the average down. People looking to get onto the property ladder now or move up it are stretching themselves and most first-timers I see are looking at least four times their income on an affordability basis.”
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