Halifax has calculated that today (19 April) is UK ‘Mortgage Freedom’ Day, when new borrowers will have earned enough to pay off the annual cost of their mortgage.
Based on the average annual mortgage repayment cost of £7,968 and the average net annual income of £26,810, Halifax has calculated that today homeowners will have earned enough, on average, to cover their mortgage payments for the rest of 2017.
However, there is a wide variation in ‘Mortgage Freedom’ Days across the country. Homeowners in Scotland can ‘celebrate’ theirs on 14 March. This is followed by Northern Ireland on 15 March and then the North and Yorkshire and Humber on 25 March.
There is a long wait for Londoners, with ‘Mortgage Freedom’ Day falling on 27 June.
Chris Gowland, mortgages director at Halifax, said: “Our research is a simple way of comparing mortgage and rent payments, quite often the largest financial commitment people make, across the UK using average regional earnings.
“Whilst it excludes other living costs, the research highlights a divide between the North and the South, with those in the South having to wait longer to reach ‘mortgage freedom’ than their counterparts in the North.”
At local authority district level, new borrowers in West Dunbartonshire, Scotland, reached ‘mortgage freedom’ first (26 February 2017).
Seven of the 10 earliest ‘Mortgage Freedom’ Days this year took place in Scotland, including North Lanarkshire (26 February) and East Ayrshire (28 February) and Renfrewshire (2 March).
The remaining three local authority areas are Copeland in Cumbria (27 February), Blaenau Gwent (2 March) and Merthyr Tydfil (4 March) in Wales.
On the other side of the border, homeowners in London have the longest to wait. Haringey homeowners don’t reach ‘Mortgage Freedom’ until 6 September, preceded by those in Brent (30 August) and Camden (26 August).
As with ‘Mortgage Freedom’ Day, ‘Rental Freedom’ Day varies across the country. Those in the North achieved ‘rental freedom’ the first this year (6 April), swiftly followed by their counterparts in Yorkshire and the Humber (7 April) and Scotland (13 April). Once again, Londoners have the longest to wait with tenants not achieving ‘rental freedom’ until 29 July.
Gowland added: “As our research confirms, homeownership is still cheaper than renting. ‘Rental Freedom’ Day falls 17 days after ‘Mortgage Freedom’ Day, showing that, despite barriers to property ownership, homeowners are still better off than renters.”
