Positive shift in mortgage affordability

Homeowners in England and Wales saw a 20% drop in the proportion of their take-home pay spent on monthly mortgage repayments in 2009.

The latest mortgage affordability research from Barclays’ Woolwich lending arm reveals that in December 2008, mortgage borrowers spent an average £196 of every £1,000 of their monthly take-home pay on their home loans.

However, a year later the proportion has fallen to £157 in every £1,000, giving an average saving of £110 per month to Welsh and English mortgage borrowers.

Regionally, the largest fall has been in London where the proportion of pay spent on repayments decreased by 23%; the North East has seen the smallest decrease at 15.5%.

Of the ten regions analysed, the Welsh spent the smallest proportion at £143 in every £1,000 of take-home pay; Londoners spend the most, at £189.

Barclays head of mortgages, Andy Gray, comments: “For the 11 million UK households who have a mortgage there is a silver lining to the recession - a substantial reduction in mortgage payments right when they need it most.”

He adds: “For them it’s a chance to save in a way they might not have been able to before, or to overpay their mortgage and cut years from its life.”

The Woolwich Mortgage Affordability index is based on data from a representative sample of nearly two million Barclays bank account holders making mortgage payments from the full range of UK lenders.

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