Mortgage payments 'requiring less disposable income'

Date:Wednesday 6th May 2009
Author: Susanna Kavka

Mortgage payments are currently taking up less of the disposable incomes of homeowners than has been the case over recent years, it has been suggested.

According to figures produced by Halifax, households spent an average of 31 per cent of their disposable earnings on such repayments during the first quarter of 2009, compared with a peak of 48 per cent in 2007.

The firm cited the recent falls in interest rates and the declines in house prices as the major factors behind the trend.

Meanwhile, it was also found that the house price to earnings ratio is presently at its lowest point for over six years, standing at 4.34 in March.

"The significant reductions in house prices, relative to average earnings, have resulted largely from the decline in house prices since the autumn of 2007," stated housing economist at Halifax Martin Ellis.

Last month, Michael O'Flynn, content editor at, said that more mortgage lending is required in order to boost the UK's housing market.