Safe as Tees houses
AS REPOSSESSIONS were today predicted to reach record levels across the UK, Tees Valley homeowners looked well-placed to tough out the financial storm.
Just 29% of their take-home pay goes on paying off the mortgage, compared to a crippling 51% for a Londoner, according to the Royal Institute of Charterd Surveyors.
Countrywide, homeowners are spending an average of 40.3% of their wage packets on home loans - just 7% off the Nineties high.
Even with Tees wages around £10,000 lower than in the South, homeowners here are still cushioned from a crash - which goes some way to explain why housebuilders are defying the national trend and pressing ahead with ambitious programmes.
Michael Poole, vice-chair of the North-east branch of the National Association of Estate Agents said that at a time when developers were reining in investments in new properties, the Tees Valley was still booming compared to the rest of the country.
“We are handling a lot more repossession properties than we have for quite a long time, across the full range of properties from the lower end of the market to those worth £200,000 to £300,000, but I still think we have got a relatively good playing field here. We are a growing area with a lot for redevelopment taking place, making this an even more attractive prospect to people in other areas of the UK.
“That will help sustain property prices in this area. From properties for first-time buyers to luxurious houses, we have a good range available, and we won’t be affected by that bust scenario talked about in the press.”
The Royal Institution of Chartered Surveyors (RICS) said nationally just under 45,000 people would lose their home during 2008 - about 123 per day.
Repossessions are directly linked to wages. A survey by ReThink Recruitment highlighted the growing pay gap between North and South - up 2% on last year - and said the average salary for staff in the North of England is just over £19,000 compared with £30,600 in London.
But David Copland, marketing and communications manager for Darlington Building Society, said that, unlike many other parts of the country, there remains a relatively large number of homes still available under £100,000.
“In our bigger towns we have a legacy of older terraced property still within reach of first time buyers as well as new build developments in the region where apartments for example have been built to appeal to first time buyers and are in their price range.”
Mr Copland continued: “There is little indication that borrowers in this region will struggle to fulfill commitments to their lenders as again, lower house prices and correspondingly lower mortgage debts mean that most mortgages remain comfortably affordable. As mortgage interest rates fall, the situation is likely to improve even further.”
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