Analysis from Leeds Building Society, said that whilst mortgage rates stood at around 15 per cent in 1980 rising house prices, driven by lack of supply, low interest rates and a rise in household debt means housing is less affordable now.
In 1980, the average UK house price was £21,000 and mortgage cost were 11.3 per cent of disposable income.
Now, the average UK house price is £292,000 and mortgage costs account for 45.1 per cent of disposable income.
Leeds BS said that the average home was 9.1 times average local wage, which is nearly triple the figure in 1997.
The building society added that this had lead home ownership levels amongst those aged 25 to 34 to collapse, going from 65 per cent in 1996 to 27 per cent in 2016.
Honouring offers, offering support
The mutual said that it would honour mortgage offers, including the offered rate, for new customers for six months from the date of issue.
It added that it would give existing customers who are up-to-date with mortgage repayments and are within three months of the end of their fixed rate deal a choice of mortgages to which they could switch.
Leeds said that it wouldn’t charge arrears fees for those that fall behind on mortgage payments until April next year. It has suspended such fees since the start of the pandemic.
It will also offers tailored support to members who are struggling.
‘Address the drastic shortage in housing’
Richard Fearon, chief executive of Leeds Building Society, said: “We stand firmly on the side of homeowners and first-time buyers and will do everything we can as a lender to help them. The recent, rapid interest rate rises following the mini Budget have been a hammer blow to borrowers and will continue to cause distress for them over the coming months.
“There is an urgent short-term need to restore market confidence and it is welcome news that the Chancellor has brought forwards his fiscal update to before the next MPC meeting. A credible balanced economic plan which has been subject to OBR scrutiny would reassure the markets, a lack of credibility could though trigger further uncertainty.”
He continued: “But the longer-term aim of this Government should be to address the drastic shortage in housing. Borrowers now face the toxic combination of higher interest rates and a lack of suitable and affordable homes.
“With enough political will, a decades-old problem can be overcome, which would start to deliver on the homeownership aspirations of millions of people.”
