Affordability for first-time buyers is at its most favourable level since 2003, according to the latest annual Halifax First-Time Buyer Review. The average house price paid by a first-time buyer in November 2011 was affordable for someone on average earnings – based on the ratio of the average house price to earnings being below the […]
Affordability for first-time buyers is at its most favourable level since 2003, according to the latest annual Halifax First-Time Buyer Review. The average house price paid by a first-time buyer in November 2011 was affordable for someone on average earnings – based on the ratio of the average house price to earnings being below the long-term average of 4.0 – in 44 per cent of all local authority districts (LADs) in the UK; the highest proportion for eight years. This compares with 42 per cent in 2010 and just five per cent at the peak of the housing market in 2007.
Despite the overall improvement in affordability, there remains a strong north – south split. 95 per cent of all the UK LADs that are affordable for first-time buyers (FTBs) are in the North compared with just five per cent in the South. 75 per cent of areas in the North are affordable against only five per cent in the South. All LADs in the North East are affordable for FTBs whereas in London there are no affordable areas for FTBs.
Martin Ellis, housing economist at Halifax, commented: “Housing affordability for those looking to get onto the property ladder for the first time has improved significantly over recent years, largely as a consequence of the decline in house prices since 2007. Nevertheless, conditions for potential first-time buyers remain tough. Difficulties raising the necessary deposit and concerns over the economic climate are preventing many from entering the market.”
