Mortgages payments to earnings ratio falls

Date:Friday 20th August 2010
Author: Susanna Kavka

The cost of repaying a mortgage as a percentage of income is at its lowest rate in 25 years, Halifax has reported.

As of June 2010, the average person who is paying for a property is using 28 per cent of their disposable income to do so.

This is compared with the 50 per cent of earnings that was needed in June 2007 to meet repayments and the average rate of 34 per cent that has been in place for the past 25 years.

Stephen Noakes, commercial director for mortgages, commented: "We believe it's important that first-time buyers understand that while there are still challenges in raising deposits, other market conditions are more positive."

This report follows on from the findings of the Council of Mortgage Lenders that the amount of money loaned to buyers during July was up five per cent on the previous month to a total of £13.6 billion.