Mortgage payments best for a decade

Published on

Monthly mortgage payments in 2011 were the most affordable for 10 years, according to new research from Barclays.

In an analysis of more than one million customers’ accounts it found that, on average, people paid out 15.4% of their take home pay last year to cover their monthly mortgage payments, compared to 2008 when it reached its highest point at 20.5%.

The lowest point since records began 10 years ago was in September 2011 when the average mortgage payment fell to 15.2%, or £488 a month.

Research commissioned by Barclays found the majority of homeowners say they are more comfortable with their current payment levels compared to this time last year. The poll of UK homeowners found that 83% have room for manoeuvre should their circumstances or interest rates change and 64% find their mortgage affordable, compared to 52% this time last year.

Fewer homeowners think interest rates will increase this year – just 40% think interest rates will rise in 2012, compared to 74% who were asked at the beginning of 2011 about the year ahead. A quarter of homeowners believe rates will start to rise in 2013.

73% of homeowners do have a plan in place for when interest rates start to rise, with around a third stating they will cut spending elsewhere by reducing their lifestyle budget (clothes, eating out) and holidays to cover any increases. Barclays is urging homeowners to ensure they keep their mortgage repayment levels under review and look at how they can cut costs – to help with other rising household costs and / or to use this money as a savings cushion for when interest rates do start to increase.

Andy Gray, head of mortgages at Barclays, said: “With the cheapest ever mortgage deals offered to homeowners last year and the fiercely competitive mortgage market it stands to reason that the average monthly mortgage payment was at its most affordable level in a decade. However Barclays is urging homeowners not to be complacent with this affordability and to act early on in 2012 to secure good mortgage deals

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Afin Bank set to offer mortgages to diaspora communities in the UK

A new digital bank focused on the African diaspora and other under-served communities is...

Skipton lowers income threshold for high LTI mortgages

Skipton Building Society is lowering the minimum income threshold required for borrowers seeking high...

GC Business Finance reports record quarter for Start Up Loans

GC Business Finance has recorded its most successful quarter to date in the delivery...

Sellers cut prices sharply to compete as buyers regain confidence

UK housing stock may be at its most plentiful in over a decade but...

Hamptons downgrades rental growth forecast as demand shifts to sales market

Hamptons has sharply downgraded its rental growth forecast for 2025, projecting that rents across...

Latest opinions

The BBC’s exposé isn’t news to mortgage advisers – but it might be to the public

Let’s be honest, for mortgage advisers, the recent Panorama investigation into conditional selling by...

Rachel Reeves rolls back mortgage rules: return to risk or reasonable reform?

Rachel Reeves is to roll back bureaucratic red tape introduced since the 2008 financial...

Reeves’ reforms are a welcome boost but the housing market must modernise

Rachel Reeves’ announcement marks a clear shift in housing policy, with measures that could...

What is the Protection Claims Charter – and how does it work?

The moment of truth for any insurance product is at point of claim. Insurers have...

Other news

Afin Bank set to offer mortgages to diaspora communities in the UK

A new digital bank focused on the African diaspora and other under-served communities is...

The BBC’s exposé isn’t news to mortgage advisers – but it might be to the public

Let’s be honest, for mortgage advisers, the recent Panorama investigation into conditional selling by...

Skipton lowers income threshold for high LTI mortgages

Skipton Building Society is lowering the minimum income threshold required for borrowers seeking high...