Friday, January 8, 2010
Category:
Property
According to Halifax, last year’s average property price was affordable for those on average earnings in 39 percent of local authority districts – with 24 percent becoming affordable between 2008 and 2009.
In contrast, those on average earnings could only afford the average house price in 6 percent of local authority districts in 2007.
An affordability measure has also shown an improvement, with mortgage payments taking up less of potential first time buyers’ disposable income. The measure, which takes interest rate changes into account, revealed a drop from 50 percent in June 2007 to 27 percent in November 2009. It is thought that this improvement is down to lower property prices combined with falling interest rates.
Nevertheless, it would seem that some prospective first time buyers have not been able to get on the property ladder due to tighter lending criteria. However, Halifax points out that there are indications that lending criteria is no longer tightening. Findings highlight that the average deposit put down by a first time buyer, as a percentage of the purchase price, has not changed since the early part of 2009 – following a noteworthy rise in 2008. Furthermore, it was found that the number of live mortgage products has increased from 1,209 in April 2009 to 1,610 in December 2009.
Housing economist at Halifax, Martin Ellis, said: "Housing affordability for potential first-time buyers has improved substantially over the past two years due to the combination of lower house prices and reduced mortgage rates. Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years. 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."
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First time buyers who have recently moved into their new property, and who would like to make some
home improvements, could consider taking out a secured loan to fund any work required – or desired. One of many finance options available, a secured loan for home improvements could allow borrowers to embark upon structural changes, repairs or simply re-decoration. A secured loan could allow borrowers to put their personal stamp on their first property, thus paving the way to that dream home.
