Higher borrowing costs are putting fresh pressure on homebuyers, with many now spending the largest share of their income on mortgage repayments since the 2008 financial crisis.
Analysis from UK Finance, the trade body for the banking and finance industry, shows buyers are spending an average of 21.3% of gross household income on initial mortgage repayments. That rising burden is weighing on affordability and reducing demand across parts of Britain’s housing market.
The pressure is not being felt evenly. East Anglia and parts of the London commuter belt are among the hardest hit, where property prices remain high, and mortgage costs are becoming harder for buyers to manage.
North Norfolk was named the least affordable local authority, with borrowers spending 25.7% of their gross income on mortgage repayments. It was followed by Hillingdon at 25.1%, Luton at 24.9%, Slough at 24.8% and Spelthorne at 24.8%.
The figures come amid wider concern about the effect of elevated interest rates and economic uncertainty on the housing market. With mortgage costs still high, many would-be buyers are delaying decisions, lowering budgets or stepping back from the market altogether.
According to reports in The Negotiator, prices also fell again last month. Amanda Bryden, head of mortgages at Halifax, said: “Property price trends continue to reflect the uncertainty linked to developments in the Middle East.”
For buyers, the latest figures underline how stretched affordability has become. For sellers and agents, they point to a market where pricing, confidence and borrowing conditions remain tightly linked.