Manchester Property News
Affordability could hit historic levels
Tom Simper
Oct 17, 2022, 10:30 AM
Significant rises to mortgage interest rates will mean fewer first time buyers able to get on the housing ladder. New borrowers won’t have the luxury of existing low rates.
We tracked ‘affordability’ over the past 20 years – based on the proportion of gross income needed to meet mortgage payments. Interest rate rises drive up monthly payments.
While it is possible that interest rates will subside if the financial markets settle, it seems unlikely and the expected rise takes affordability to levels that normally trigger a slowdown in house price growth and transactions.
In London, the average first time buyer will need another £500 pcm if mortgage rates rise to 6% as forecast. That comes on top of a similar increase earlier this year.
Outside the more expensive parts of the UK housing market, there may be more headroom to afford interest rate increases. Source: Dataloft, ONS, Bank of England, Nationwide.
About The Blog
This Blog looks at what is happening in Manchester, the property market, events and community news along with investment ideas and tips for those loosing to invest in the area.
Tom Simper - Editor
Manchester is one of the fastest growing markets in the country. If you need any assistance buying, selling or letting properties in the area we have over 30 years of experience and local knowledge to help.
T: 0161 441 0563
E: [email protected]
Leave a comment