Rising housing demand is a headache for homeowners |
|
|
Published
:
Wed, 04 Oct 2006 13:15
|
LONDON - The growing demand for houses has fast turned into a big headache for homeowners who are struggling to keep up with mortgage payments, new research from Moneyfacts suggests. The financial information company revealed that as compared to 1996, mortgage payments are taking an extra 7 percent of pre-tax salaries of homeowners.
In 1996, homeowners had to set aside 16.5 percent of their pre-tax salaries to take care of mortgage payments, but today they are shelling out 24 percent of their pre-tax salaries as mortgage payments. Moneyfacts said that large mortgage debt as well as the end of tax relief on mortgage interest was responsible for this hike.
First-time property buyers are struggling even more to meet their mortgage payments as they have to set aside a greater percentage of their salary towards the same. They are paying 27 percent of their salary towards mortgage debt as compared to 18 percent in 1996. However the average income of first-time buyers has almost doubled from £17,308 to £34,216 in the same period. But the average house prices have also registered a jump from £64,692 to £181,122, Moneyfacts said.
"This statistic looks gloomy enough in its own right," said Andrew Hagger, Moneyfacts spokesman. "When you factor in additional increased expenses such as higher council tax and utility bills, it is no surprise that the UK is now faced with the current personal finance debt."
The report also said that while incomes were rising, they were not keeping pace with the soaring house prices. Analysts at Moneyfacts.co.uk also said that the situation might not resolve anytime soon since it is predicted that there will be a house price rise of 40 percent over the next four years.
|
|
|
|
|
|
Print this Story
Couples must save £28,860 before planning to buy first home: RICS 