According to new research from the Halifax, home affordability for potential first-time buyers improved significantly in 2009. The Halifax First-Time Buyer Annual Review shows the average price paid by a first-time buyer was affordable for someone on average earnings in nearly four in ten (39%) of local authority districts.
This represents a substantial improvement on 2007, the zenith year for property prices, when only 6% of areas were affordable.
The proportion of disposable income devoted to mortgage payments by a potential new first-time buyer on average income – a measure of affordability that includes the impact of interest rate changes – has almost halved from a peak of 50% in June 2007 to 27% in November 2009.
The current level is below the average over the past 25 years of 34%.
This improvement in affordability arises from a combination of lower house prices and interest rate reductions.
Commenting on the figures Halifax housing economist Martin Ellis said:
“Housing affordability for potential first-time buyers has improved substantially over the past two years due to the combination of lower house prices and reduced mortgage rates.
“Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years.
“The tightening in lending criteria over the past two years is, however, making it very difficult for some to take advantage of lower property prices and mortgage rates.”
There are, however, signs that lending criteria has stopped tightening. For example, statistics from the Council of Mortgage Lenders show that the average deposit paid by a first-time buyer as a percentage of a property’s purchase price remained around 25% in 2009 following a significant increase in 2008.
There is also evidence of increased mortgage availability. The number of live mortgage products has risen by 33% from a low of 1,209 in April 2009 to 1,610 in December.
** Property Help & Advice **
You can obtain additional information about mortgages and buying property on FindLaw.
Depending on your circumstances, however, you may want to speak with a solicitor who specialises in property law. You can be matched with a solicitor in your area for free via solicitor matching services, which can also help you to understand the best course of action and whether you are ready to hire a solicitor.
You may also like:
- International: Two sisters sentenced to be raped
- International: Sudanese teenager risks twenty lashes for ‘indecent dressing’
- Law and government: Survey shows two-thirds of people feel they…
- European law: Google hits out at European Commission
- Environmental law: WWF threatens legal action against government for failing…