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.
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