'More affordable homes' for FTBs

Posted: 08 Aug 2011 12:04:01 GMT

The number of towns affordable to FTBs is on the up, it has been found.

An increasing number of homes are becoming affordable to first-time buyers (FTBs) at present, new research has suggested.

According to the Halifax First-Time Buyer Review, the number of towns with property within the price range of FTBs is at its highest level since 2003.

The local authority district (LADs) is judged to be affordable if the average house cost for an FTB is lower than the price a person earning an average wage can pay, which is based on the historical average house price to income ratio of 4.0. 

Halifax used its own housing statistics database and information from the Council of Mortgage Lenders, the Office for National Statistics and the Department for Communities and Local Government to come up with its findings.

It was demonstrated that the average house price paid by an FTB in June 2011 was affordable to those living in 48 per cent of all LADs - an amount markedly higher than the 40 per cent recorded in 2010 and the six per cent reported in 2007.

From a geographical perspective, a clear north-south divide was apparent from the figures, with 80 per cent of LADs in the north being within the price range for those looking to get their foot on the property ladder.

This compared with just two per cent of regions in the south - a total more than ten times less.

Simon Thiru, housing economist at Halifax, said: "It is encouraging that housing affordability for first time buyers in general has improved significantly over recent years, as a consequence of the marked falls in both house prices and interest rates since 2007."

The industry figure added: "However, there is a distinct north-south divide within this improvement as the majority of affordable areas are in the north."

Earlier in the month, head of investment management at London Central Portfolio Hugh Best said property prices in London are likely to escalate over the coming years.
 

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