More than one in three UK homeowners wouldn’t be able to afford their home if it were listed on the market at its value today, claims new research.
The Halifax House Price Index, released figures saying that house prices were 2.2% higher than the same time last year, with the average house price now levelling in at £220,962.
The figures support the suggestion that a significant proportion of those who own their current home would be priced out of the market if they attempted to purchase again.
More than one in three of the 3,000 property owners surveyed by MyJobQuote said their home’s value had increased to the point that they would be unable to afford it at the current value – an average of £50,000 more than their original purchase price – or that changes to their financial circumstances would now make it impossible.
Whilst these figures show an increase in prices, they are currently dropping nationally at an average of more than 3%.
One in 10 said they wouldn’t buy their home again today because they wouldn’t want the same mortgage, including the length and rate of the loan, a quarter said they would have made different decisions in hindsight because they had spent more money than they expected.
In light of these revelations, calls are being made for new homeowners and mortgage seekers to analyse their financial situation effectively before committing to their property purchase.
Whilst mortgage brokers and lender guidelines are able to ascertain the affordability of a mortgage to your current financial snapshot, you should also ensure that you will be comfortable with mortgage payments alongside your monthly bills and other outgoings.