In some 4 areas out of 10 in the UK, property has become affordable for first-time buyers.
Research by Halifax has shown that a person on average earnings could afford to be a first-time buyer in 39 per cent of local authority districts, the BBC News website has reported. When house prices were at their peak in 2007, only 6 per cent of local authority districts had affordable homes for first-time buyers.
The improvement in affordability has come about from the reduction in house prices and lower interest rates which have benefited mortgage customers. Nevertheless, first-time buyers have suffered because tighter lending criteria and higher deposits have been brought in by lenders.
During 2009, average deposits for first-time buyers were 25 per cent of the purchase prices, according to figures from the Council of Mortgage Lenders.
Housing economist at Halifax, Martin Ellis, commented: ?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.?
North-east England has seen the biggest increase in the proportion of local authority districts offering affordable homes for first-time buyers. Conversely, London and Northern Ireland have property which remains outside the reach of first-time buyers.
In 2009 the average price of first-time buyer property was ?133,794 ? 10 per cent lower than in 2008. First-time buyers borrowed an average of ?104,000 during the year, meaning that the average deposit was ?29,439.
