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Payments to rise as proportion of income

Economists warn that mortgage payments could rise as a proportion of take-home pay by almost one-third.

Nationwide&#39s October 2003 House Price Index suggests that if the base rate rises next week, as many analysts expect, payments as a proportion of take-home pay will rise to between 29% and 32%, compared with 27% now.

The report also shows house prices rose by 2% in October with the average property price now standing at £131,947, up from £130,473 in September.

With typical income multiples rising from 2.6 to 2.9 x in 12 months and controversy over self-certification affordability, some commentators see storm clouds ahead.

Vince Cable MP, Liberal Democrat shadow chancellor, says: “People borrowing at the edge of their means may get clobbered in the next few years.”

Nationwide group economist Alex Bannister adds: “Rate rises will cause the market to slow but decisions on taxation in next year&#39s Budget could prove considerably more influential.”


SLB to launch equity deals

Standard Life Bank will launch its first equity release mortgages next month. The bank says its entry into the growing market follows a long period of preparation, taking into account the needs of its customers and in particular their need to know the risks of equity release. Standard Life adds that, with its experience as […]

We are having to interpret the FSA&#39s rules ourselves

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Mortgage Advice Bureau signs up estate agent network

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UCB Home Loans to launch buy-to-let remortgage service

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