Research published by Halifax Building Society this week shows that the cost of buying a home in the UK has hit its lowest for 15 years.
A mortgage now costs the average person 26 per cent of their salary, compared with 48 per cent at their pre credit crunch peak in late 2007. Low interest rates and falls in price have combined to bring many areas of the country to their most affordable level in a generation.
The biggest improvement in affordability has been seen in Northern Ireland, where some buyers have to part with less than 15 per cent of their disposable income to pay for a new home. In London and the South East the average buyer will have to part with 35 per cent of their income to finance a mortgage, a figure which stood at 56 per cent in 2007.
Taking the whole country into account, the proportion of income needed for mortgage payments has almost halved in the past five years. Halifax’s research, based on local incomes and property prices in 383 districts, might give some hope to first time buyers, however, mortgage lending is still pretty scarce, with Santander increasing its variable rate from 4.24 to 4.74 last week.
According to Hometrack property prices fell by 0.1 per cent in August. Prices in London, which has shown considerable resistance to the trend, did not budge either way. “As the supply/demand balance weakens, we expect to see downward pressure on house prices for the remainder of 2012” stated a Hometrack spokesperson..