Mortgage costs ‘account for third of earnings’

Posted: 26 Sep 2006 11:38:20 GMT

A new report claims that housing market affordability in Britain is stretched almost to its limit, with mortgage costs accounting for a third of average wage earnings.

A new report claims that housing market affordability in Britain is stretched almost to its limit, with mortgage costs accounting for a third of average wage earnings.

The Joseph Rowntree Foundation suggest that many Britons are spending more than a third of their wages on mortgage costs, before other bills, debts, household repairs, food and clothing, with younger households and first-time buyers hit hardest.

The Royal Institution of Chartered Surveyors (RICS) has called for changes to be made to the current situation, as recent surveys show that housing market growth is continuing to outstrip wage inflation.

RICS senior economist, David Stubbs, commented: "Unless house building levels improve, and levels keep pace with population growth and rising income and wealth, people on low and middle incomes will continue to find it difficult to access the housing market."

The UK's current supply of affordable housing has reached a low of just 35,000 homes available in 2005/06, according to the Joseph Rowntree Foundation.

The New Policy Institute has carried out a statistical analysis of Britain's housing market for the charity and concludes that around two-and-a-half million people are currently living in overcrowded conditions, with problems worst in London.

First-time buyers continue to struggle to afford their first home, with many forced to turn to family and friends to help fund their purchase.

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