Mortgages are more affordable
Mortgages cost £2,000 more per year in London while in the South East they amount to £612 more, contrasting with the rest of the UK where payments have fallen by an average £100.
Payments currently take up 28% of a new borrower’s income, 3% less than five years ago and 20% less than in 2007.
The biggest falls in payment outgoings are in Northern Ireland (£2,880), Scotland (£912) and the North (£780).
Due to low mortgage rates and increased average earnings market conditions have been favourable for mortgages over the last five years.
Craig McKinlay, mortgage director at Halifax, said: “In the majority of regions, mortgages are substantially more affordable today than they have been in years.
“In fact, new mortgage borrowers are spending far less on their mortgages than the highpoint of the market in 2007, when people were spending close to half (48%) of their income on their mortgage.
“The reality is mortgage affordability outside of London and the South East is close to its best level for 12 years. In London however, affordability is worse than it was in 2009, as the capital has shown exceptional house price growth.”
Both the private and public sector have seen changes to affordability in the last five years, as in 2009 mortgage payments accounted for 31.2% of a public sector workers income, but by 2014 this fell to 27.9%.
In the private sector meanwhile mortgage payments fell from 29.7% to 27.5%.
Craig McKinlay added: “Public sector workers in particular have benefited from higher wages over the last five years, with double digit earnings growth in some areas of the UK contributing to substantially improved figures for mortgage affordability.
“With only £500 separating the average salaries of both sets of workers, the public sector has achieved what would have seemed unlikely five years ago – parity with the private sector.
“Scotland is the clear winner for mortgage affordability for both public and private sector workers, with a mortgage there only taking up an average of 18% of a new public sector salary, which is substantially less than the UK average.”