Mortgages at most affordable for 14 years - Mortgages - News - Moneyfacts


Mortgages at most affordable for 14 years

Mortgages at most affordable for 14 years

Category: Mortgages

Updated: 19/08/2013
First Published: 19/08/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Mortgages are at their most affordable in 14 years, according to new research by Halifax that examined repayments in proportion to income.

The bank's Affordability Review revealed that mortgage payments accounted for 27% of a new borrower's income in the second quarter of 2013, significantly below the average of 36% recorded over the past 30 years.

In stark contrast, at the height of the housing market boom in 2007 mortgage payments in proportion to income reached a peak of 48%.

The bank attributes lower house prices and falling mortgage rates, due to the launch of the Government's Funding for Lending Scheme in August last year, as the drivers of improved affordability.

However, the research also uncovered the clear north / south divide that exists within the housing market, with mortgage payments in proportion to disposable earnings at their lowest in Northern Ireland (17%), Scotland (19%), Yorkshire and the Humber (22%) and the North West (23%).

Payments were highest in Greater London (36%), the South East (34%) and the South West (32%).

"Improved mortgage affordability has been a key factor supporting housing demand and is helping to stimulate the modest recovery that we are currently seeing," commented Craig McKinlay, mortgage director at Halifax.

What Next?

Compare the best mortgages deals

How to buy a house: Making an offer to completion

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 Any products featured may be withdrawn by their provider or changed at any time.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

Goodbye to the Help to Buy Guarantee

On 31 December, phase two of the Help to Buy initiative will be withdrawn from the market. It’s certainly done wonders for the high loan-to-value sector, so we thought we’d take a closer look at the significance of the scheme and the effect it’s had.

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.