More affordability for first-time buyers in 2008
More affordability for first-time buyers in 2008
Wednesday 31st December 2008
Despite the economic downturn the affordability of property for first-time buyers has improved significantly in the last year, a new review has found.While high street businesses go into administration and redundancies are feared throughout the UK, young couples taking their first steps on the housing ladder can take comfort in their increased ability to purchase a home.
According to the new Halifax First-Time Buyer (FTB) Affordability Review, the house price to earnings ratio is at its lowest level in five years and marginally above the 20-year historical average.
The number of local authorities with affordable properties for first-time buyers has more than trebled in 2008 and the affordability situation for those joining the market has improved in seven of the 12 UK regions.
"There has been a marked improvement in housing affordability in many parts of the UK," said Martin Ellis, chief economist at Halifax.
"First-time buyers, in particular, are benefiting, especially outside the south of England and the Midlands. We expect this trend to continue in 2009."
Housing is most affordable for first-time buyers in Scotland, Yorkshire and the Humber, though the amount of affordable properties has not increased in London, the south-west, the West Midlands, Wales and Northern Ireland.
And financial experts said the Halifax findings did not tell the whole story of the current housing market.
"Affordability may have improved - but this is undermined by the lack of available mortgages and higher deposits needed for first time buyers," said Daniel Barnes, editor of myfinances.co.uk.
"Recent high inflation makes it hard for first-time buyers to afford to save and fear of job losses makes them averse to taking risks on burdening themselves with mortgages," he added.
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