Home-buyers in London are on average spending 56% of their earnings on their housing costs, with recent interest rate rises adding £3,000 per year to average mortgage bills
Rising interest rates are seeing house sales fall through and the price of homes across the country falling, according to figures from Britain’s biggest building society.
The Office for National Statistics says that London’s house prices fell in October, and that it was the only region in the country to report a decline for the month. Prices in the capital fell by almost 1per cent compared with September, as elsewhere house prices increased 0.9per cent or more in the north-east of England, West Midlands and Scotland.
The figures were reported yesterday, as the Bank of England was increasing interest rates by 0.5per cent to 3.5per cent – the highest level since the global financial crisis of 2007-2008.
But figures from mortgage-lenders the Halifax show that average UK house prices recorded their third consecutive and largest monthly drop since 2008, falling by 2.3per cent in November.
In the short-term, prices look set to continue falling as Rightmove has found the average asking price for a newly listed property has fallen by 2.1per cent in December so far, whilst the RICS UK Residential Survey of Chartered Surveyors has found demand among house-buyers also continued to fall in November.
The rental market is just as tough. Rents across Britain have risen by 12.1per cent to record highs over the past year and the average renter now spends 35per cent of their salary on accommodation – the highest level in a decade according to Zoopla.
A year ago, interest rates were