Affordability down

Posted: 11 Jul 2007 10:41:12 GMT

Affordability continues to fall in the UK housing market, according to a new report.

Affordability continues to fall in the UK housing market, according to a new report.

Figures from the Council of Mortgage Lenders (CML) show that May saw yet another decline in affordability.

Mortgage interest payments have reached their highest level since 1992, with figures for May standing at 19.1 per cent, compared to 18.7 per cent in April.

In addition, the percentage of income used to make mortgage payments has increased between the months, with the average person spending 16.3 per cent on payments in April, while this jumped up to 16.6 per cent in May.

"For anyone wanting to get a foot on the property ladder or move house; each month affordability is becoming worse," said Michael Coogan from the CML.

The organisation's director general also said that stamp duty is a problem for home movers.

"The record number of borrowers who are now paying stamp duty makes a difficult situation even worse, despite the financial windfall to the Treasury," he added. "This needs to be addressed urgently."

Mr Coogan went on to point out that the report does not take into consideration the 0.25 per cent interest rate rises announced in May and July, meaning the situation of low affordability is set to get worse.

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