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Home Affordability At Best Since 1997
Home affordability is now at its best since 1997, as mortgage payments fall to the lowest average recorded for over two decades.
According to new figures from Halifax, in the second half of 2011 mortgage payments accounted for the lowest proportion of earnings for 27 years.
In the fourth quarter, average payments for both first time buyers and movers stood at 27 per cent. Over the past 27 years, the average has stood at 37 per cent.
During the third quarter of 2007, the average peaked at 48 per cent. The boost in affordability is thought to be due to lower house prices and reduced mortgage rates.
Housing economist Martin Ellis said: "The prospect of an exceptionally low Bank of England Bank Rate over the foreseeable future should maintain affordability at favourable levels in 2012. This should support the market over the coming 12 months."
Analysis of one million accounts by Barclays also recently put mortgages at their most affordable in ten years in 2011, thanks to the low base rate.
The rate was slashed to the historic low of 0.5 per cent in March 2009.
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Article date: 1/17/2012 12:00:00 AM