Home affordability at its best since 1997 |  |
Mortgage payments for a new borrower in the second half of 2011 were at their lowest as a proportion of disposable earnings for 14 years, according to new Halifax research.
Typical mortgage payments for a new borrower - both first-time buyers and homemovers – at the long-term average loan to value ratio stood at 27% of disposable earnings in the fourth quarter of 2011. This is well below the average of 37% recorded over the past 27 years.
Overall, there was a modest fall in payments relative to earnings over the past year from 29% in 2010 Quarter 4.
Mortgage payments have nearly halved as a proportion of income in recent years from a peak of 48% in 2007 Quarter 3. Lower house prices and reduced mortgage rates have been the main drivers behind the significant improvement in affordability.
