§ Mr. Ovenden
asked the Secretary of State for the Environment (1) how the net outgoings of a mortgagee currently purchasing a house compare with the cost of purchasing a similar house in February 1974; and how this purchase change compares with the increase in the retail price index over the same period and with the increase in average earnings;
(2) what is his estimate of the increase in the net outgoings of mortgage payers since February 1974, taking account only of those whose payments were in respect of the same mortgage on both relevant dates.
§ Mr. Armstrong
The average building society mortgage advance taken out in February 1974 was £6,450, on which a typical mortgagor would have made net monthly repayments of £46.12p (at a mortgage rate of 11 per cent. gross). Net monthly repayments on that same mortgage would have decreased to £39.20p by 253W February 1978 (at a mortgage rate of 8.5 per cent. gross).
The average building society mortgage advance taken out in January 1978 was £9,589 (provisional). A typical mortgagor would make net monthly repayments of £55.06p (at a mortgage rate of 8.5 per cent gross).
All calculations are on the basis of a 25 year annuity mortgage, at the BSA recommended interest rate, with tax relief at the basic rate.
The retail price index increased between February 1974 and January 1978 by 86.5 per cent. Average earnings in the same period rose by 95.5 per cent.