Finances Getting Tougher For Those With Secured Loans
There has been some hint of good news for those individuals with a secured loan, or those looking to buy their first house over the course of the past few months.
Property prices have fallen to more affordable levels for those wanting to buy and interest rates on secured loans have fallen by record levels in the space of two months, with the prospect of further reductions in the New Year, saving borrowers a large amount of their regular monthly loan payments and thereby freeing up more disposable income to enable them to meet their other financial commitments.
Despite this reduction in the cost of a loan, affordability is still an issue for many homeowners who are continuing to find it difficult to keep up with their loan repayments, according to the latest survey from the UK housing review, which has been jointly conducted by the Building Society’s association and the Chartered Institute of Housing.
The survey found that the average cost of owning a home had risen to 22 per cent of household earnings and although this may not seem a lot to some people, the figure has risen from a low point of 12 per cent in 1994. The highest costing area, not surprisingly, is London, where the average is 26.8 per cent of earnings and the lowest is Scotland, with only 15.2 per cent.
Neil Johnson of the Building Society’s Association said “Although the headlines are dominated by talk of falling prices, with the review finding that the long term supply and demand problems remain, it looks like the affordability problems will not have left the market by the time that buyers return.”
