Analysis of how much homeowners pay for their mortgages in relation to how much they earn show Londoners are spending the biggest proportion on their repayments.
The figures revealed the least affordable mortgages were in London and the South East with borrowers in the capital paying just under half their earnings on their home loan.
This was much higher than the UK average. Indeed, across the UK as a whole, mortgage-holders repayments had remained at or just below 30% of the average disposable earnings since 2009.
But in London the proportion of their earnings people were forking out on their mortgages had increased by 18% since 2008.
Andy Bickers, mortgage director at Halifax, said: “Despite rising house prices and interest rates, the average UK earnings have also risen in line, meaning that national affordability remained broadly flat.
“This is good news for first-time buyers, homeowners and a boost to the housing market.”
Most affordable areas
Whilst London was the place where homeowners were facing the biggest affordability challenges on mortgage repayments, things were very different in Scotland.
Here, affordability was the best in the UK with repayments at 18.2% as a proportion of residents’ average earnings. In 2008, it represented just under 30.6% of their salary – so affordability has improved considerably in the last decade.
It was a similar story in Northern Ireland where mortgage costs were currently at 19.3% of the average earnings, down from 39% in 2008.
Indeed, according to Halifax, the most affordable local areas for mortgages were all in northern England and Scotland.
A closer look
Zoning in more closely, Copeland in Cumbria was named as the most affordable place in Halifax’s study. Here, typical mortgage repayments accounted for 13% of average local earnings, followed by West Dunbartonshire in Scotland, Barrow-in-Furness, Burnley and Hyndburn in the North West.
Meanwhile, the least affordable areas were Brent and Haringey, where the average mortgage payments on a new mortgage loan accounted for 61% of average local disposable earnings. This was followed by Hackney (61%) and South Bucks (60%).
