Mortgage Payments in the UK Have a Record Low

Mortgage payments in the UK have a record low

Monthly payments on mortgage loans declined in August by 23% compared with last year.

In absolute terms, this figure dropped from £ 792 (€ 905) to £ 609 (€ 696). The current level is the lowest in the past seven years. In addition, mortgage payments now account for 29% of net income of taxpayers, while the year before they had to spend 40% of net income, reported Daily Mail.

This resulted in reduced base lending rate of the British Central Bank to a record low value of 0,5%. It is expected that at this level, the base rate will continue in 2010. Earlier this month, Britain's biggest bank HSBC has lowered the rate on a mortgage up to 1.99%.

At the same time, the growth of consumer activity and an increase in the number of mortgage loans leads to an increase in housing prices. Such a trend seen over the past months, will eventually lead to an increase in monthly payments on a mortgage, experts believe.