Average mortgage repayments approaching 33 per cent of monthly income akin to 2008 financial crash levels
Homeowners are spending more to live in their house than at any point in the last 15 years, with mortgage repayments equalling almost 33 per cent of monthly income.
The cost of living crisis and increase in interest rates has put renewed pressure on property-owners, with house prices soaring and the cost of repayments nearing the 2008 financial crash levels.
New research by property experts octane capital found that Brits on an average salary of just under £31,500, or £2,621 per month, are fulfilling repayments equalling 32.8 per cent of income, equating to £859.41 per month,
This is just five per cent higher than pre-pandemic, and marginally lower than the 34.3 per cent in 2008, following the banking crisis.
According to the figures, the average house price is £276,019.
In addition to concerns about the impact of the cost of living crisis and rise in interest rates, which has squeezed wages, “ , CEO of Octane Capital, Jonathan Samuels said “wage growth has simply failed to keep pace with these rising costs and so the proportion of our income required to cover our monthly mortgage commitments is now substantially higher than it has been for many years.”
“Unfortunately, this cost only looks set to increase” he added, saying people struggling should “consult a mortgage professional and see if they can swap to a product offering a better rate. For those currently looking to buy, it’s vital to factor in any potential increase and not to borrow beyond your means based on current rates.”