Mortgages in 2011 most affordable
Borrowers paid out 15.4% of their take home pay last year to cover their monthly mortgage payments. In 2008 this figure was at its peak at 20.5%.
The lowest point for this figure, since records began 10 years ago, was in September 2011 when the average mortgage payment fell to 15.2%.
The majority of homeowners said they were more comfortable with their current payment levels compared to this time last year, revealed opinion research commissioned by Barclays.
It said 83% of homeowners had room for manoeuvre should their circumstances or interest rates change and 64% found their mortgage affordable compared to 52% this time last year.
Fewer homeowners thought interest rates would increase this year. Just 40% thought interest rates would rise in 2012 compared to 74% who were asked at the beginning of 2011 about the year ahead.
A quarter of homeowners believed rates would start to rise in 2013.
Nearly three-quarters of homeowners said they had a plan for when interest rates started to rise with around a third stating they would cut spending elsewhere by reducing their lifestyle budget and holidays to cover any increases.
Barclays has urged homeowners to ensure they keep their mortgage repayment levels under review and look at how they could reduce spending to help with other rising household costs.
Andy Gray, head of mortgages at Barclays, said: “With the cheapest ever mortgage deals offered to homeowners last year and the fiercely competitive mortgage market it stands to reason that the average monthly mortgage payment was at its most affordable level in a decade.
“However Barclays is urging homeowners not to be complacent with this affordability and to act early on in 2012 to secure good mortgage deals as they may be able to cut their monthly mortgage payments further.”
Homeowners said their top three concerns for homeowners were energy bills, the cost of running a car and the cost of food.
Gray added: “We know that other financial factors are likely to bite again this year but homeowners can’t afford to forget about their mortgage just because base rate is predicted to remain at record lows throughout 2012.
“The cost of energy bills, running a car and food may be beyond their control but homeowners have an opportunity to look at their mortgage payments and shop around for better deals to ensure their mortgage remains affordable during 2012 and beyond, which will also help to offset any other rising household costs.”