Affordable mortgages aren’t a thing of the past. According to the Telegraph today, Mortgages are at their most affordable for 14 years.
The claim is based on the average mortgage payments for new borrowers, first-time buyers and home movers. The Telegraph speak of only 27% of disposable earnings needed for mortgages in the fourth quarter of 2011. Mortgage payments for a new borrower are now at their lowest in proportion to earnings since 1997.
A 14 year high for Affordable Mortgages in UK
The details were released from Halifax this week. So although most families are feeling the pinch,the figures are implying a different situation. Halifax claim it marks the lowest proportion since spring 1997 when a 26% proportion was recorded. This stands well below the 37% average over the past 27 years.
Once again the study highlighted a North, South divide. The least affordable areas located in London and the South East.
Kensington and Chelsea in London were named as the least affordable local authority district. Here mortgage payments are taking up 78% of disposable income.
Martin Ellis, housing economist at Halifax, said:
“The cuts in mortgage rates in the last few years have resulted in a significant improvement in housing affordability for those able to raise the necessary deposit to enter the market.. The marked improvement in affordability was a key factor supporting housing demand in 2011. The prospect of an exceptionally low Bank of England base rate over the foreseeable future should maintain affordability at favourable levels in 2012. This should support the market over the coming 12 months, helping to offset the impact of the downward pressures on demand from the ongoing difficulties faced by households regarding their finances and uncertainty about economic prospects.”
Do you feel these figures are truly representative of things changing? Will affordable mortgages remain or are these clever figures from Halifax?