With mortgage costs continuing to soar, homeowners in selected regions could pay 85% of their household income on monthly repayments, research from Legal Bricks has revealed.
The analysis was based on the average salary for a couple and house price in 100 towns and cities.
Oxford topped the list of the most expensive places to live in the UK, as ongoing interest rate hikes push the average cost of a fixed-rate deal to almost 7%.
Just behind Oxford was Bath, where households could spend 82% of their income on mortgage costs, followed by London at just over 79%.
Nationally, a couple on a 7% fixed-rate deal could expect to pay around 43% of their salary on mortgage repayments, with a joint pre-tax salary of £63,000 and a house worth around £297,000.
The most expensive locations were in the South, while the most affordable were in the North.
In Oxford, house prices were almost double the national average, at just under £600,000, yet a combined salary was only just above average at £66,618.
With a 7% fixed-rate deal, householders in Oxford would need to earn eight times their joint salary to afford their current home, while those in Bath and London would have to earn 7.66 and 7.2 respectively.
Given that lenders normally apply a 4.5 income multiplier, buyers in the most expensive locations could struggle to remortgage when their deal ends.
Darlington was the most affordable place, followed by Hartlepool and Middlesborough.
Even with a 7% mortgage deal, homeowners would typically spend less than 30% of their income on housing in these location, dropping to just over a quarter in Darlington.
Property prices in the most affordable three locations were significantly lower than the national average – £153,505 in Darlington, £151,759 in Hartlepool, and £167,885 in Middlesbrough.
Mike Connolly, director of Legal Bricks, said: “It’s difficult to believe that the average 2-year fixed deal was just 2.34% in December 2021.
“Now homeowners are facing crippling mortgage costs – with some having to find an extra £1,000 a month, on top of higher food and energy costs.
“Our analysis reflects the North-South divide in the housing market and while some areas are more affordable than others, households are still being squeezed.
“Demand for housing is still strong but it will be interesting to see how the nation adapts.
“Will they downsize, rent out rooms, or move to a town or city they hadn’t previously considered?”
