Mortgages account for 30% of household spending

Monthly mortgage payments account for 30 per cent of an average household's spending in the UK.

This is according to research by Castle Trust a…

Monthly mortgage payments account for 30 per cent of an average household's spending in the UK.

This is according to research by Castle Trust and it highlights how a significant portion of monthly budgets are required if people want to become homeowners.

There were also notable regional differences in terms of how much people had to pay, as those in the south-east can expect to part with 32.1 per cent of their monthly income, but this drops to only 22 per cent in Northern Ireland.

Perhaps surprisingly, London (31.2 per cent) did not emerge on top of the study, as it was behind both the south-east and north-east. However, this could be explained by the higher overall wages offered in the capital.

Sean Oldfield, chief executive officer at Castle Trust, said: "Even with mortgage rates well below their historic average, mortgage payments represent a significant proportion of a household’s monthly spending. Households are vulnerable to any rise in their mortgage rates.

"The risk of rising mortgage rates is a major issue for homeowners with their finances already under pressure and shared equity can play a major role in reducing risks … by cutting monthly mortgage commitments."

It comes after a recent report from Shelter found that people in the UK are struggling to meet their housing costs and in many cases this is causing emotional distress. One in four adults said they cannot get to sleep at night because of their financial situation.

On top of this, one in three revealed their family life is being negatively affected because they are depressed.

This is why consumers need to draw up a budget to make sure they stay on top of their mortgage repayments. If people find they are struggling to meet the terms, then action has to be taken straight away or else this could lead to major problems further down the line.

By James Francis

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