By Lezanne Janse van Rensburg, 22nd January
2010
First-time homeowners have a lot to smile about after Halifax
announced that first-time mortgages are more affordable.
According to Halifax's First-Time Buyer Annual Review, a report
which tracks and assesses mortgage affordability, nearly a quarter
of the UK's local authority regions are able to provide prospective
homeowners with more promising mortgage deals. This means that
approximately four in every ten districts have more affordable
first-time buyers mortgages.
The news regarding first mortgages has brought some relief to
struggling first-time buyers after the recession made it close to
impossible for individuals to take their position on the property
ladder.
There has also been a drastic drop in the amount of disposable
income being used to pay mortgages. According to Halifax's report
the proportion saved towards first-time mortgages has fallen from
50 percent in June 2007 to only 27 percent in November 2009.
Approximately four in every ten districts
have more affordable first-time buyers mortgages.
According to Halifax's housing economist, Martin Ellis the
improvement of first-time buyers mortgages is "due to the
combination of lower house prices and reduced mortgage rates".
But Ellis added that the current affordability does not
necessarily hold the same promises for all. "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."
Although the financial crisis has resulted in a rapid drop in
housing prices, Nationwide recently indicated that there has been a
rise in property value with a 5.9 percent increase in 2009. This
means that an average home would cost potential homeowners
approximately ₤162,103 according to figures released in December
2009.
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