London residents 'benefit most' from falling mortgage interest payments

Date:Monday 1st June 2009
Author: Max Freedman

People living in London have benefitted more than anywhere else in Britain from "the significant drop in mortgage interest payments", according to an economist at Halifax.

Commenting on the negative retail price inflation rate, Suren Thiru noted that while costs fell most dramatically in London, the capital still has the highest general price level in the UK.

Figures published by Halifax as part of a series of research pieces on wealth and savings trends indicated that mortgage interest payments were the most significant driving factor on retail prices in the past 12 months, falling by 39 per cent on average.

"All UK regions have seen their retail price inflation rate turn negative over the past year, driven by mortgage interest payments that fell, on average, by more than a third," Ms Thiru stated.

The bank indicated that the rate of inflation in London fell more between the first quarter of 2008 and the same period in 2009 because mortgage payments account for a higher proportion of residents' total weekly spend.

Last week, the Royal Institution of Chartered Surveyors commented that an increased number of mortgage approvals in the coming months could provide a "vital" boost to the housing sector.