A steep surge in interest rates has made it harder to buy a home, despite wages growing much faster than house prices over the past year, figures from mortgage lender Halifax showed.
Halifax, part of Lloyds Banking Group PLC, said the cost of a typical 25-year mortgage, with a fixed interest rate for the first five years and a 25% deposit, now amounted to 35% of a single average full-time salary, up from 30% a year ago, and 23% before the pandemic.
"Typical monthly mortgage payments are up by around a fifth, which is a big jump at any time, but particularly during a wider cost of living squeeze," Kim Kinnaird, mortgages director at Halifax, said.
Mortgage rates have surged significantly over the past year as the Bank of England battles to bring inflation down to its 2% remit while rising prices have put a hole in consumer finances.
The report comes as data from Rightmove shows the average 5-year fixed mortgage rate is now 5.79%, up from 3.89% a year ago, although down from 5.86% last week.
The average 2-year fixed mortgage rate is now 6.40%, up from 3.77% a year ago, down from 6.46% last week.
Rightmove’s mortgage expert Matt Smith said: "The positive direction for rates continues this week albeit a little more slowly, with five-year rates edging down slightly more than two-year equivalent products."