The Bank of Scotland has released figures showing that the average mortgage payment in Scotland is nearly half what it was five years ago.
The figures show that the proportion of income that Scottish people spend on mortgages is at a 10-year low. Typical mortgage payments for first-time buyers and home movers made up just 20% of their income. This makes Scotland the most affordable place for mortgages in the UK – as the UK average stands at 26%.
The ten most affordable local authority districts in the UK are all in Scotland.
Housing economist at the Bank of Scotland, Nitesh Patel, said: “Lower house prices and reduced mortgage rates have led to a significant improvement in housing affordability for those able to fund the necessary deposit to enter the market over the past five years. As a result, mortgage payments for a typical new borrower currently account for the lowest proportion of earnings for 10 years. ”
He added: “The relatively low level of mortgage payments in relation to income is providing support for Scottish house prices. The prospect of interest rates remaining at low levels for some time yet is expected to continue to be a key factor supporting the demand for homes, helping to keep house prices around their current level during the remainder of 2012.”
An expert from Wilson Andrews, Insolvency Practitioner in Glasgow (who wrote this article) said: “It’s probably good news to Scottish residents that their mortgage payments are most affordable in the UK. It should be pointed out, however, that the current low interest rates are only temporary – and many homeowners could struggle if and when interest rates rise in the future.
“If you’re struggling to keep up with your payments, however, what can you do? Well, some people find it hard to keep up with their mortgage payments because of rising day-to-day costs and debts. If you can manage to reduce daily costs and pay off your debts, it could free up some money in your budget to put towards your mortgage.
“When managing your budget, have a look at price comparison websites to see whether you’re getting the best deal on your bills. And see whether you could cut down your food shop by switching to supermarket ‘own brands’.
“If debt repayments are getting in the way of your mortgage payments, it might help to get them reduced to a level you can afford. Talk to a qualified debt adviser to see whether there are any debt solutions that could help you.”
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