One in six homeowners are finding it harder to keep up with their monthly repayments, despite mortgage affordability reaching its best level for 10 years, research suggested today.
The average homeowner spent just 15.4% of their take-home pay on mortgage repayments in December, the lowest level since Barclays first started carrying out the analysis in 2002.
The group, which analysed transactions from 1.3 million current accounts, said the high levels of affordability had been caused by the record low level of the Bank of England base rate, as well as pay rises people had received since interest rates first fell.
The improvement in affordability comes despite the fact that house prices have risen by 68% during the past 10 years, while average salaries have increased by only 37%.
Unsurprisingly, given the current low level of interest rates, 13% of homeowners said they could easily afford their current mortgage repayments and were not worried about interest rate rises, while 39% said they were comfortable and could afford some increase in repayments.
A further 28% of people described themselves as being stretched, although they said they still had enough disposable income to help them cope with a rate hike.
But 16% admitted that their mortgage was now less affordable than it had been a year ago, 36% of whom said this was because their salary was now lower, while 29% said their outgoings had increased.
Andy Gray, head of mortgages at Barclays, said: "It stands to reason that with interest rates at an historic low, mortgage affordability is at its best in a decade, but it is crucial that homeowners are not complacent.
"When asked specifically about coping with rising interest rates, it was great to hear that 71% say they either already have a plan in place to manage increased monthly mortgage repayments, or that they will be unaffected as they are on fixed rates.
"But homeowners who are not already thinking about their mortgage certainly need to be, to ensure they have a contingency plan when interest rates start to increase."
:: YouGov questioned 1,027 people between January 28 and February 1.Reuse content