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 It is now over 6 months old so the content may be out of date.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 Any products featured may be withdrawn by their provider or changed at any time.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

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.