Wednesday, Jun 13, 2007
Affordable my @...!
T-graph: Mortgage squeeze worst for 25 years
"With interest rates having plumbed to historic lows over the past five years, panglossian economists have long been able to argue that mortgages have remained affordable, despite house prices rising to record levels in comparison to peoples' salaries"... panglossian economists... ahahahah! This is a great definition... let me not make names here
Posted by confused76 @ 11:08 PM (169 views) Add Comment
5 Comments
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1. Pr said...
Morgage squeeze worst for 25yrs / morgage affordability at a 15yr low, is this a typo, or am I missing something? Was an extra 10 slipped in by mistake?
2. paul said...
David Smith lives in Panglossia. It's in South East London, and his property's proximity to it's centre leaves his house untouchable by unfavourable market conditions. Apparently.
3. night said...
I downloaded the CML's Excel spreadsheet of FTB mortgages yesterday and had a flick through it. Although the press has widely reported that FTB's are now spending 18.7% of their income on houses, I was surprised to find that this was actually not very high for data since the 70's. 18.7% is barely above average, the most FTB's were spending per month on mortgage payments was touching 28%.
I presume that I'm missing something. I realise that interest rates got very high in the 70's and 80's, does that account for the high mortgage repayments? Any way to normalise the data?
4. confused76 said...
night
From a different link, I understood that 18.7% income = interest payments, which is the portion of the mortgage monthly payment that goes to the actual landlord, the bank. 28% may be referred to "interest + principal repayment"
5. Utterlee said...
"18.7% is barely above average, the most FTB's were spending per month on mortgage payments was touching 28%."
I don't really see how this can be accurate. My housemate was told he'd be able to get a £200k mortgage, and even interest only that would account for almost 50% of his salary. Surely most first time buyers now must be in similar situatiions mortgage & salary wise given current house pirces?