'Stronger spending power' for those with mortgages

Posted: 03 Aug 2009 11:15:02 GMT

People in the UK with mortgages have seen their spending power increase by a tenth in the last 12 months, it has been reported.

According to Halifax, which used data from the Office of National Statistics, the Bank of England and the Council of Mortgage Lenders, homeowners have seen their discretionary income grow by £97 between March 2008 and March 2009.

Bearing taxes and essential household bills in mind, those with mortgages now have 48 per cent of their net monthly income available to spend on so-called non-essential items - this is the highest level for three years.

With interest rates dropping to 0.5 per cent in March - and staying at that level ever since - many mortgage holders have seen their monthly home loan repayments drop significantly.

Suren Thiru, economist at Halifax, commented: "The considerable fall in mortgage repayments over the period has been a key factor behind the increase [in discretionary income], providing a timely boost to mortgage holders' spending power."


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