Thursday, January 29, 2009
Category:
Home Improvements
Halifax’s First-Time Buyer (FTB) Affordability Review tracks the affordability of housing within 406 local authorities (LAs) across Britain, inclusive of 32 London boroughs.
The review is based on data from Halifax’s own housing statistics database and ONS data on average earnings.
LA’s are deemed to be affordable if the average property price for a FTB is lower than that which someone on average earnings in the area can pay, based on the historical average house price earnings ratio of 4.0. This conservative benchmark, used to assess affordability, is a 20 year historical average based on single income.
There has been a considerable improvement in the house price to earnings ratio over the past 18 months, with it having fallen from a high of 5.84 in July 2007 to 4.56 in November 2008 – its lowest level for over 5 years.
The number of LAs in the UK, where housing is affordable for a FTB, more than trebled in 2008. At this time the average price paid by a FTB was affordable for those on average earnings in 14 percent of LAs, as opposed to just 4 percent in 2007.
The amount of LAs across the UK, where the average property is affordable for a potential FTB on average earnings, has risen from 18 in 2007 to 57 in 2008. These figures were the result of a survey of 406 LAs.
In 2008, levels of affordability improved for FTBs within 7 of the 12 UK regions. Between 2007 and 2008 the most noticeable increases in the percentage of LAs that have become affordable for FTBs were in Yorkshire and the Humber (0 to 40 percent) and Scotland (30 percent to 67 percent).
On a similar note, housing is most affordable for FTBs in Scotland and Yorkshire and the Humber. With regards to the former, property prices are within the means of those on average earnings in practically 2 out of 3 LAs (67 percent). This figure stands at 4 out of 10 (40 percent) in Yorkshire and the Humber.
No increases in the number of affordable LAs have been noted in London, the South West, the West Midlands, Wales or Northern Ireland. The average property, bought by a FTB in these regions, remains unaffordable for those on average earnings in all the LAs surveyed.
Martin Ellis, chief economist at Halifax, commented: "There has been a marked improvement in housing affordability in many parts of the UK. First-time buyers, in particular, are benefiting, especially outside the south of England and the Midlands. We expect this trend to continue in 2009."
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First time buyers requiring extra funds to put their personal stamp on their new home could consider taking out a secured
home improvement loan. A secured home improvement loan could be used to create that perfect living space, and can usually be repaid over a term to suit the borrower from 5 to 25 years. Projects which could be funded with a secured home improvement loan include a simple refresh throughout, and bigger projects such as refitting kitchens and bathrooms. Some homeowners who purchased a smaller two bedroom property, who then find themselves with additions to their family may wish to use a secured home improvement loan to add extra bedrooms or additional living space for a growing family.
