London is seen as an expensive place to live and some might think that they would be better off anywhere else, especially when it comes to mortgages. However, Halifax is reporting that people living in London gain more than people living elsewhere in the UK thanks to ?the significant drop in mortgage interest payments?.
Suren Thiru, an economist at Halifax, suggested that due to the negative retail price inflation rate, London has the highest general price level in the UK, though it has experienced a huge drop in costs. Halifax recently carried out a series of surveys on wealth and savings trends from which figures show that mortgage interest payments had the most impact on retail prices in the past 12 months, falling by 39 per cent on average
?All UK regions have seen their retail price inflation rate turn negative over the past year, driven by mortgage interest payments that fell, on average, by more than a third,? Ms Thiru stated.
Halifax pointed out that London?s rate of inflation fell more between the first quarter of 2008 and the first quarter of 2009. This was ascribed to the fact that a majority of residents? total weekly spending was on their mortgage payments.
Last week, the Royal Institution of Chartered Surveyors (RICS) said that a ?vital? boost to the housings sector could be seen in the increasing number of mortgage approvals in the months ahead.
Meanwhile, Steve Turner head of communications at the Home Builders Federation, has suggested that lenders should make available more home loans at competitive rates. Mr Turner said: ?The crux of the issue in terms of the housing market is getting banks lending again at sensible rates to people who want to buy homes.?
