Mortgages costing up to one-third of pay
Property hotspots are seeing as much as one-third of take-home pay go on mortgage payments, according to a study by the Woolwich, the mortgage arm of Barclays.
Borrowers in the London area of Hackney South and Shoreditch pay the highest percentage of their earnings on their mortgage, with an average 32.8 per cent; this figure represents the average amount over the three-month period from June to August 2005. This is closely followed by Brent East with 30.8 per cent and Vauxhall with 30.6 per cent. Of areas outside London, Oxford East (24.1 per cent) has the highest expenditure. The average payment across England and Wales was 18.7 per cent of take-home pay in August 2005.
Andy Gray, head of mortgages for the Woolwich, said: ‘London has long benefited from relatively high property prices but the downside of this is that in certain areas borrowers are spending a higher proportion of their income on their mortgage payments.
‘The 50 least affordable areas tend to be up and coming neighbourhoods, often in inner cities, rather than those established as having high property prices. For instance, places like Hackney and Brent tend to attract young professionals who will borrow as much as they can to get a property in the next up and coming area. They are hoping that property prices will increase quickly as the area gentrifies and are also confident that as young professionals their earnings will rise quickly to drive down their mortgage payments as a percentage of income.’
Home owners warned of flood risk complacency
The Environment Agency is warning that too many people are ignoring the risk of flooding in this country. New research has revealed alarming levels of complacency among households at risk of flooding from rivers or the sea, despite the increasing frequency of flooding at home and abroad.
Barbara Young, chief executive of the Environment Agency, said, ‘Although we’re unlikely to see flooding in the UK like that caused by the Boxing Day tsunami and Hurricane Katrina, there is still a significant flood threat here from extreme rainfall and coastal surges.
‘Devastating floods do happen here too, like those in autumn 2000, and more recently in Boscastle and Carlisle. There’s a tendency for people to think “‘It will never happen to me”. The fact is it could, we just don’t know when. People in this country cannot afford to be complacent about flood risk.’
Five million people in two million properties in England and Wales live in flood risk areas, yet despite this, Environment Agency research indicates that as many as two fifths (41 per cent) of these people are still unaware of the threat.
The research also revealed that one-third (34 per cent) of people in flood risk areas had not checked whether their buildings and contents insurance covers flood damage and only seven per cent had found out how to get flood warnings. Two-fifths (42 per cent) admitted they would not know what to do in the event of a flood.