The affordability of paying a mortgage for buyers looking to make their first steps onto the property ladder is at its most favorable for 12 years.
The proportion of disposable earnings devoted to mortgage payments by potential first time buyers stood at 27% in September 2010, according to research conducted by Halifax.
It is the lowest figure recorded since December 1998 and almost half the peak of 50% of disposable income that a first time buyer needed to pay a new mortgage with in September 2007.
This marked improvement in affordability over the past three years has been primarily driven by a combination of lower house prices and falling mortgage rates.
However, while the research focuses on the affordability of mortgage repayment costs, it makes no mention of the problems first time buyers face when trying to raise the necessary deposit.
With average house prices fluctuating around the £160,000 mark and most lenders wanting at least a 10% deposit before they consider handing out a loan for a mortgage, potential first time buyers face an uphill struggle in saving for their first home.
The North East is the most affordable region in the UK for first time buyers, 83% of local authority districts here are affordable to first time buyers, more than in any other region.
Only 5% of first time buyers paid stamp duty between April and November 2010 as a result of the temporary increase in the stamp duty threshold for first time buyers from £125,000 to £250,000 announced last March.
Nationally, 39% of home purchases made by first time buyers have benefitted from the increased allowance. First time buyers in the South East have benefited most from the change, almost three quarters (73%) of first time buyers in the region not paying stamp duty due to the increase.
"The 'noughties' were a difficult period for many looking to get onto the property ladder," Martin Ellis, housing economist at Halifax, commented.
"The substantial rise in house prices over much of the decade prevented many potential first time buyers from entering the market, however, affordability has improved significantly over the past three years.
"Whilst the tightening in lending criteria experienced across the mortgage industry since the onset of the credit crunch in 2007 deterred first-buyers from trying to secure mortgage finance, there are now encouraging signs of a modest improvement in mortgage availability."
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