According to a new research from the Woolwich, an average of 19 per cent of peoples takes home pay on mortgages.
This percentage was set to increase as the effects of the base rate rise filter through in September, according to Barclays.

Woolwich reported that the cost of servicing mortgages increased in August, up 18.8% from July, to almost '550.

A new high has been registered in London, where people are spending 23.5% of their pay on mortgages. There was no change in the West Midlands in the amount people spend on their mortgages, while South-West has seen a proportional decrease.

There was a great impact on affordability due to increasing house prices, a buoyant summer and the higher cost of fixed rates.

Andy Gray, head of mortgages for Woolwich said: "It will become increasingly questionable whether another increase in interest rates is needed as the steam already seems to be coming out of the market."

Companies such as Nationwide and Assetz are very cautious about the future of the market. According to Assetz, the rate of growth was likely to ease heading into the autumn months, back to between 5% and 5.5%.

Assetz said that with the threat of another interest rate hike hanging over homeowners, the rate of growth was likely to ease heading into the autumn months, back to between 5% and 5.5%.

Despite the Bank of England's rate rise, Nationwide expects house prices to grow by around 5% in 2006.