According to data from the lenders’ trade body, the proportion of income that buyers spend on mortgage capital and interest payments stood at 19 per cent at the end of March 2013.
In the first quarter of 2014, borrowers saw their net spending rise from 18.3 per cent of income in Q4 2013.
The figures showed there are now 11.2m mortgages in the UK, with loans worth a record £1.28trn, equal to about 76 per cent of gross domestic product. Of those, 9.6m are owner-occupied and 1.6m are buy-to-let.
The average outstanding mortgage rate was 3.25 per cent. Roughly 35 per cent of existing mortgage holders are on fixed rates, while 65 per cent are on variable rate products.
With interest rate rises looming, the proportion of all borrowers taking out a fixed-rate mortgage is now at 89 per cent.
The CML’s matched those issued earlier last week by the Bank of England. Both showed a typical new mortgage was £135,200, while the average outstanding mortgage in the UK now stands at £115,000.
The average monthly payment on a £115,000 mortgage stood at £560 and the average monthly payment on a £115,000 interest-only mortgage at 3.25 per cent was £311.
Paul Smee, director general of the CML, said: “Additional housing to help correct the imbalance between supply and demand is the main way of relieving affordability pressure and household indebtedness attributable to mortgage borrowing.”
Borrower worries
A recent survey conducted by YouGov on behalf of conveyancing firm Myhomemove and consumer body the HomeOwner Alliance found that 34 per cent of UK homeowners are worried about rising interest rates. This increased to 49 per cent of owners between the ages of 25 and 34.
Adviser view
Mark Harris, chief executive of London-based mortgage broker SPF Private Clients, said: “Borrowers are opting for fixed rates and when interest rates start to rise, wage inflation will improve. That said, there does need to be flexibility for high-net-worth borrowers.”
