6 Nov

House price affordability improving, says economist

House price affordability improving, says economist

Halifax has released its latest house price figures, showing a further fall in values during October.

However, the bank has said the level of affordability was "improving significantly".

The figures show that during the month the average house price in the UK dropped by 2.2 per cent, while the annual dip was 13.7 per cent.

Halifax chief economist Martin Ellis commented: "The house price to average earnings ratio has fallen below 5.0 for the first time for four-and-a-half years. We expect a further improvement in the ratio over the coming months."

Such a development could help first-time buyers, particularly if they are able to get cheaper mortgages in the wake of the Bank of England's 1.5 per cent base rate cut.

Although some banks are holding back from passing on base rate reductions because of high interbank lending rates, insurance firm Legal & General has said that these are now falling and this should help bring down fixed rates over time.

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