Good conditions for first time buyers - Mortgages - News - Moneyfacts


Good conditions for first time buyers

Good conditions for first time buyers

Category: Mortgages

Updated: 04/08/2009
First Published: 05/05/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Home affordability for potential first time buyers has improved significantly since mid 2007.

The proportion of local authorities where housing is affordable to first time buyers has grown dramatically in the last 18 months, more than trebling, according to the latest Halifax FTB Affordability Review.

In the first quarter of this year, the average price paid by a first time buyer was affordable for someone on average earnings in 21 per cent of local authorities, up from a lowly 6 per cent in the third quarter of 2007.

"There has been a marked improvement in housing affordability for potential first-time buyers in many parts of the UK over the past 18 months," said housing economist at the Halifax, Martin Ellis.

"This trend continued in the first three months of 2009."

Another key indicator - the house price to earnings ratio - is also encouraging, showing property is at its most affordable level for six years.

The proportion of disposable earnings devoted to mortgage payments has also fallen because of price decline in the property market and mortgage rate cuts.

However, conditions are likely to remain challenging for the rest of 2009 at least, warned Mr Ellis, who surmised: "Increasing unemployment, low consumer confidence and the constraining effects of the continuing dislocation of the financial markets on the availability of mortgage finance are all likely to exert downward pressure on the market over the coming months."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Remortgaging bounces back

Remortgaging has been enjoying a welcome boost in recent months, despite September’s slight dip, with many homeowners capitalising on record low mortgage rates to boost their finances.

Bank of Mum and Dad holds the (house) key

The Bank of Mum and Dad is an important source of finance for many young adults, and it seems that they still hold the key – in more ways than one.

Fee-free mortgages on the rise

Mortgage rates may be at record lows, but for some people, the extra costs associated can make switching deals a financial impossibility. It’ll come as welcome news, then, that the number of fee-free deals has more than doubled over the past year!