According to the findings of financial advice website Moneyfacts.co.uk, the average mortgage accounts for first-time buyers is nearly 27 per cent of monthly earnings, almost nine per cent more than the equivalent figure from a decade ago.
This sharp rise can be apportioned to the average house price nearly tripling since 1996 (from £64,692 then to £181,122 now) while the average earnings of mortgage applicants have barely doubled.
Another reason for the steep increases is the scrapping of Mortgage Interest Relief at Source (MIRAS), which gave a 15 per cent tax relief on the first £30,000 of a home purchase loan.
"The net effect is that mortgage payments take a much bigger chunk of our income than they did in 1996," said Andrew Hagger, head of news and press at Moneyfacts.co.uk.
"This statistic looks gloomy enough in its own right, but when you factor in additional increased expenses such as higher council tax and utility bills, it is no surprise that the UK is now faced with the current personal debt crisis."Those with poor credit ratings will find a mortgage difficult to come by sometimes. To find out more about subprime mortgage products, click here.
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