Mortgage payments 'lowest in years'

07/02/12

By Stephanie Gonzalez

Mortgage payments as a proportion of household earnings are at their lowest level for 14 years for new borrowers, lender Halifax has said.

Continuing record low interest rates at the Bank of England have helped homeowners with their monthly bills but have also seen house prices stagnate in the last eight months, it said.

Property prices rose 0.6 per cent in January but the average house price is still 0.9 per cent lower over a rolling three-month period, its figures show.

Events in the eurozone, and the UK's ability to weather any economic storm, will be key to how house prices perform in the next few months, Halifax said.

The company's housing economist Martin Ellis said: "If the UK can avoid a prolonged recession we expect broad stability in house prices in 2012."

One of the leading indicators of completed house sales - the industry-wide number of mortgages approved to finance house purchase - was stable at nearly 53,000 for the third month in a row in December.