Four in 10 UK areas see improved affordability for FTBs

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by Kay Murchie

First-time buyers (FTBs) may be interested to learn that in 39% of local authority districts, property is now affordable to them.

According to this year’s Halifax First-Time Buyer Annual Review, someone on average earnings could now afford the average FTB property in almost four out of 10 areas in the UK.

The improvement in affordability is as a result of lower interest rates and house price falls.

The research compares to 2007 when just 6% of local authority districts were affordable for the average earner.

However, while the outlook seems bright for this group of people who are attempting to get a foot on the property ladder, the fact remains that in order to secure a mortgage, they still need a hefty deposit of at least 25%, according to the latest figures from the Council of Mortgage Lenders.

“Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years,” said Martin Ellis, housing economist at Halifax.

“The tightening in lending criteria over the past two years is, however, making it very difficult for some to take advantage of lower property prices and mortgage rates,” adds Ellis.

The Halifax’s research found that the largest increase in the proportion of local authority areas where homes are now affordable for FTBs is in north-east England.

However, in London and Northern Ireland, the average FTB property remains unaffordable for someone on average earnings in all local authority areas.