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Property Affordability Improves For First Time Buyers

Wed, 06 Jan 2010
Property is now affordable for first-time buyers in nearly a quarter of all areas in the UK, new research has revealed.

According to the latest Halifax First Time Buyer Annual Review, the average first time buyer property could now be bought by a person on average earnings in 39 per cent of local authority districts.

The figure is a significant improvement on 2007, the year in which house prices peaked, when homes in only 6 per cent of UK areas were affordable for people with average incomes.

Halifax said the improved affordability is due to a combination of lower interest rates and house price falls.

However, tighter lending criteria imposed by banks and building societies has prevented many first-time buyers from taking advantage of the situation.

Martin Ellis, housing economist at Halifax, said: " 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 ."

Industry figures showed that the average cost of a property bought by a first-time buyer was £133,794 during 2009 – 10 per cent lower than in 2008 – while the average deposit put down was £29,439.
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