Affordability improves as homebuyer income inches to over £40k

Homebuyers’ average income crept above £40,000 in June 2013 for the first time in over four and a half years according to the National Mortgage Index from Mortgage Advice Bureau.

Related topics:  Mortgages
Amy Loddington
16th July 2013
Mortgages
This is the first time that purchasers’ income has averaged more than £40,000 since January 2009 when MAB first began collecting this data. June’s average of £40,510 was 2% higher than in May (£39,648) and 9% higher than June last year (£37,164).

Using data from more than 500 brokers and 800 estate agents, the National Mortgage Index also shows that purchase prices grew by 1.4% in the month and by 4.5% since June 2012 to £224,450.

Affordability has therefore improved gradually over the last year as a result of prices growing at a slower rate than incomes. However, homebuyers’ average income has grown significant more (by 9%) than annual inflation (2.7% ) or average weekly earnings (3.7%) suggesting that more affluent borrowers are driving up the average as they take advantage of the housing market recovery.

This trend has been especially visible across Greater London, the South West, the Midlands and the North where homebuyers’ typical incomes have risen by 10% or more since June 2012. Only three regions – the South East, East Anglia and Wales – saw average incomes fall.

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