Houses are more affordable for some than at any time in the last 25 years!

Published on 19th January 2010

First time buyers can now better afford to get onto the housing ladder in four out of ten areas in the UK according to a recent study by Halifax, and mortgage payments in relation to earnings are considerably lower than in the last 25 years which makes home ownership more affordable for millions of potential buyers.

The combination of the lowest base rate in over 300 years, fewer buy to let investors and increasing rents have led to more first time buyers moving onto the housing ladder and this should start to have a positive effect on the housing market in general.

In 2009, the average cost of mortgage repayments versus earnings fell to just 34% for the year which is well below the average over the last 25 years and this is helping more first time buyers and low to middle income households to move on to or up the property ladder. Indeed the monthly percentage of earnings used on mortgage repayments for the average household peaked in July 2007 at 50% but this has now fallen to 27% in Nov 2009.

Lenders are increasingly asking for higher deposits to access their best interest rates and unsurprisingly one of statistics to also come out of the Halifax report was that the average deposit for a first time buyer is now £29,439, which explains why the average age of a first time buyer has risen to 30 years old and to 39 years old for first time buyers that have not sought financial help to build their deposit.

Despite promising signs in terms of affordability and more first time buyers purchasing homes, many lenders are still restricting their lending and are becoming much stricter with their lending criteria. This is strangling some of the life out of the property market because eager buyers are unable to secure the mortgage that they need to move on to or up the housing chain. Contractors in particular are struggling to secure mortgages when approaching the lenders directly as many institutions still don't trust the nature of your income.

We are able to bypass inexperienced High Street branch staff and deal with the key decision makers inside major lenders to secure a mortgage based on your contract rate alone. This can make all the difference to your application and will help you get in to your new home quicker and without the hassle of spending hours on the high street.

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