Mortgage costs are rising as a percentage of household income, it has been confirmed.
Mortgage payments now account for 19.9 per cent of the average household income, according to the latest Woolwich Mortgage Affordability Research - the highest figure recorded since the survey's inception in January 2002.
The reason for this is that average incomes have risen by just five per cent in the last year, whereas average mortgage payments have spiralled 15 per cent in the same time period.
Homeowners will be further alarmed to hear that the situation is likely to worsen in the near future, given that the rate of interest is set to increase later this week.
"Mortgage borrowers are really getting squeezed," confirmed Andy Gray, head of Woolwich Mortgages.
"With the costs of council tax, petrol, food and drink, as well as mortgages, all increasing consumers are seeing a large amount of their earnings being diverted to essentials, putting real pressure on disposable income.
"Most commentators are suggesting that interest rates will increase further this week.
"However, our research shows that that the three interest rate increases over the last 12 months are already starting to have a major impact on borrowers."
© 2007 Adfero Ltd
