2013 saw 1.1m people with mortgage debt 4.5 times their income
09/10/2015
More than 1.1 million people in the UK were straddled with mortgage debts more than 4.5 times their income in 2013, according to figures from the Office of National Statistics (ONS).
In 2013, 1,117,000 households had mortgage debts amounting to more than 4.5 times their disposable income, which equals one in every seven houses with a mortgage. A quarter of these houses were in London, and a further 27% were located in east or south-east England, the ONS said.
The figures have fallen slightly since 2013, partly thanks to tougher rules introduced in the Mortgage Market Review (MMR) in 2014. Lenders are now required to carry out extensive checks on the spending habits of mortgage applicants to make sure they will be able to afford their mortgage, even in times of financial stress.
Many industry experts have claimed that the small fall is concerning, and with the introduction of the MMR regulations the number of households with high levels of mortgage debt relative to their income should have fallen at a much faster rate.
The ONS also claimed that following a “substantial rise in leverage” between 2001 and 2008, total household long-term debt fell from a peak of 131.2% of income in the third quarter of 2008 to 118.5% of income in the second quarter of 2015.
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