Mortgage costs taking a bigger cut

According to the Woolwich, mortgage debt accounted for 19 per cent of take home pay in August, up from 18.8 per cent in July, with some areas of London – Holborn and St Pancras – reaching a staggering 31.2 per cent.

Andy Gray, head of mortgages for the Woolwich, said: “Increasing house prices, a buoyant summer market and the higher cost of fixed rates are having an impact on affordability.”

Findings of increasing strain on homeowners’ pockets come as other surveys point to the effect that debt and rising fuel bills are eating into disposable incomes.

Aside from London, the north-west and Wales were among the worst to suffer from dented incomes.