20 Apr

Affordability 'on the increase'

Affordability 'on the increase'

The level of affordability for UK homes has improved significantly since the middle of 2007, a new study has indicated.

In the third quarter of 2007 the typical mortgage payments for a new borrower represented 48 per cent of average income but are now down to 31 per cent, Halifax revealed.

This is less than the long-term average over the last 25 years of 37 per cent.

Halifax's study of 407 local authority areas across the UK found that the largest improvements came in Northern Ireland, where the share of income used on mortgage payments fell from 63 per cent to 37 per cent, followed by London, down from 56 per cent to 34 per cent.

Martin Ellis, the chief housing economist for the bank, observed: "There has been a marked improvement in housing affordability across the UK over the past 18 months."

Such a situation may help boost first-time buyers, for whom it has been suggested the availability of mortgage finance is now improving.

The managing director of first-time buyer services firm FirstRungNow.com, Helen Adams, said earlier this month she expected other lenders to follow HSBC's lead in offering 90 per cent loan-to-value mortgages for first-time-buyers.

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