That is the verdict of a study which has uncovered evidence 40% of the UK’s homeowners were committing over a third of their salaries on purchasing their properties.
This is despite the fact it flouts the golden ‘28% rule’ which advocates people should not commit more than this proportion of their gross monthly income on rent or mortgage.
Home improvements
It’s not only paying to own a home which is overstretching UK homeowners. Investments in home improvement projects were also exposing them to debt as they borrowed money to pay for renovations to their home.
Indeed, the research by agency Cogent and Ragdoll Research, found people were paying cash for 55% of the cost of modifications and improvements on their properties but funding the rest with cards, bank loans and financial schemes.
Why people move
The ‘Moving Minds’ study looked into the reasons why people move, and analysed the behavioural psychology behind the decisions they made.
It uncovered the various UK home mover categories or ‘tribes’ which people fell into and also delved into the psychology behind the mindsets which influenced their purchase.
Psychologist Professor Richard Crisp of Durham University, who contributed to the report, said he was not surprised by the large financial commitment people were making towards their homes.
“When it comes to our sense of identity, our homes are absolutely key,” he said. “They satisfy deeply centred drives toward safety and security, they are culmination of life goals and aspirations, they are the stylistic expression of who we are, and they provide the psychological scaffolding that enables the relationship to grow.
“With such immense psychological value, people’s willingness to invest in them is quite understandable.”
[box style=”4″]
What Mortgage has teamed up with L&C to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
[/box]
Loading ...