Wage earners becoming slaves to their mortgages
The rising cost of housing, and the tendency for mortgage lenders to advance ever-bigger homeloans, are factors turning many younger wage earners into little more than slaves, according to a report by a panel of academics.
The report warns that the soaring cost of property in the UK means that Britain is risking becoming “a grossly divided society”, as it was between the haves and the have-nots in Victorian times.
The report, entitled ‘On the Treadmill’, says large mortgage loans are forcing increasing numbers of young parents to work longer hours, with many taking on second jobs to pay a mortgage which could be up to seven times’ their salary.
The report’s findings have been unveiled at a time when the British Bankers’ Association reported that the average mortgage is now a record-breaking £152,800, compared to £50,000 in 1994.
A borrower with a £150,000 mortgage would be making repayments of around £1,100, or 75% of their take-home pay for an employee earning the average salary.
The report, compiled by academics from the universities of Aberdeen and Loughborough, says that many young couples are little better than “bonded labourers” to their mortgages.
Dr John Bone, lecturer in sociology at Aberdeen, said: “They are like bonded labourers because they are so heavily indebted. The burden of their mortgage debt will place great stress on their families.”