Loan Affordability Improves For First Time Buyers
It looks as though there could be some positive news for the housing and homeowner loan markets as we enter the New Year, which certainly makes a pleasant change from all the doom and gloom we have been hearing about for the past twelve months.
According to the latest survey from the Halifax, the cost for someone wanting to buy their first home is now at the most affordable level it has been for more than five years. The Halifax, one of Britain’s largest homeowner loan providers, regularly reviews the average price of a house to average earnings ratio, and the figures have shown that affordability for first time buyers has improved continuously for the past eighteen months, reaching a ratio of 4.56 in November 2008.
This is the lowest level recorded since July 2003, when the ratio stood at 4.54. At its highest level in July 2007 the same figure was 5.84, meaning that a first time buyer would have to spend almost six times their salary to be able to buy an average house.
The review, which is carried out on a quarterly basis, follows the average price of properties against earnings across 406 local authorities and has found that the number of areas where housing is now classed as affordable has increased by threefold, with Yorkshire, Humberside and Scotland being the most affordable areas to buy a property.
Due to this increased affordability, it should now theoretically be easier for a potential first time buyer to be accepted for a homeowner loan or mortgage, which in turn should provide a welcome boost to the housing and homeowner loan markets across the board.
Martin Ellis of the Halifax said “There has been a marked improvement in housing affordability in many parts of the UK. First time buyers, in particular, are benefiting, especially outside the South of England and the Midlands. We expect this trend to continue in 2009.”
