UK mortgage borrowing up by 550 per cent in ten years
(28 February 2007)

Mortgage borrowing in the UK increased from £165 billion in 1987 to £1,078 billion by the end of last year, according to the Motley Fool.

This represents an increase of 553 per cent, with a compound annual growth rate of 10.4 per cent, the financial website claimed, using data from the Bank of England.

The last six years have had a particularly marked impact as the housing boom has gripped the nation. In each of the past six years, the mortgage burden in the UK has increased by ten per cent or more per annum.

Wages have also grown, but not at the same rate as mortgages. From 1987, after-tax disposable income has grown by 219 per cent, meaning that affordability has declined and that many first-time buyers face a rather bleak financial future.

Those who already own houses have benefited greatly, however, with the total value of private sector housing reaching £3.8 trillion.

In December, the average UK house price rose above £200,000 for the first time.