Many concerned over mortgages as prices top £100k

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Wednesday 25th April 2007

Mortgages are a major concern for many Britons in the light of news that the average house price has exceeded £100,000 nationwide, it has been claimed.

The Halifax house price index, published this week, showed that for the first time, no town in the UK has an average property cost below the six-figure sum.

In the north-west, the value of property on which mortgages had been granted rose above £150,000, while Northern Ireland had an average in excess of £200,000.

Earlier this month, the Royal Institution of Chartered Surveyors (Rics) revealed its own research which detected significant house price rises in Northern Ireland.

Meanwhile, the institutions housing market survey noted "unusually large increases in new instructions [to sell property] in the north-west and East Midlands".

Jeremy Leaf, spokesperson for Rics, said: "Mortgage repayments remain a concern for many following the Bank of Englands recent monetary tightening."

"The housing market has absorbed the initial interest rate barrage, but history tells us that further rate rises could knock confidence," he added.

Concern over mortgages may be having an effect on all forms of lending, according to industry experts.

Figures from the British Bankers Association (BBA) found that, in March, growth in mortgages slowed, while unsecured loan lending fell.

The increase in money lent via mortgages was £5.1 billion compared with a six-month average of £5.5 billion.

Unsecured loan borrowing decreased by £200 million over the course of the month, reflecting a similar fall in February.

David Dooks, director of statistics at the BBA, said: "Higher mortgage costs for households are no doubt a factor in the subdued demand for unsecured borrowing."

"In the last two months, demand [for mortgages] has moderated a little and, with no short-term prospect of costs reducing, mortgage lending growth should ease further in the months ahead," he continued.

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