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Soaring house prices hit incomes Soaring house prices hit incomes
(about 1 hour later)
Rocketing house prices and soaring mortgage payments are taking their toll on disposable incomes in NI, according to a new economic survey. Rocketing house prices and soaring mortgage payments are taking their toll on disposable incomes in NI, a new economic survey suggests.
The report was produced by consultancy firm Price Waterhouse Coopers.The report was produced by consultancy firm Price Waterhouse Coopers.
NI's average monthly mortgage repayments are now 150% of average weekly take-home pay - almost twice the level of a decade ago, it said.NI's average monthly mortgage repayments are now 150% of average weekly take-home pay - almost twice the level of a decade ago, it said.
Ten years ago, the average house cost about four times annual earnings, but it is now more than nine times.Ten years ago, the average house cost about four times annual earnings, but it is now more than nine times.
Householders are facing a financial squeeze, with domestic rates going up, along with utility bills, the survey said.Householders are facing a financial squeeze, with domestic rates going up, along with utility bills, the survey said.
With rising petrol prices and higher interest rates, there is far less cash to spend on other goods and services.With rising petrol prices and higher interest rates, there is far less cash to spend on other goods and services.
The survey also warns that interest rates could go as high as 6% by the end of the year.The survey also warns that interest rates could go as high as 6% by the end of the year.
It is widely expected that the Bank of England's Monetary Policy Committee will increase the cost of borrowing by a quarter of a percent on Thursday.It is widely expected that the Bank of England's Monetary Policy Committee will increase the cost of borrowing by a quarter of a percent on Thursday.
Philip McDonagh, chief economist with Price Waterhouse Coopers in Northern Ireland, said while the local economy continued to perform reasonably well, households faced a financial squeeze.Philip McDonagh, chief economist with Price Waterhouse Coopers in Northern Ireland, said while the local economy continued to perform reasonably well, households faced a financial squeeze.
"Looking ahead, rising debt service will contribute to slower consumer spending growth over the next 2-3 years and this will impact the services sector, which has underpinned economic growth in recent years.""Looking ahead, rising debt service will contribute to slower consumer spending growth over the next 2-3 years and this will impact the services sector, which has underpinned economic growth in recent years."