Housing at its most AFFORDABLE level for more then six years

Dan:_4

Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years.

According to the latest Halifax FTB Affordability Review, the house price to earnings ratio - a key affordability measure - is lower now than it has been for more than six years.

Furthermore, the house price to average earnings ratio has declined from a peak of 5.84 in July 2007 to an estimated 4.34 in March this year - a fall of 26 per cent.

http://www.ftadviser.com/FTAdviser/Mortgages/Products/FirstTimeBuyers/News/article/20090505/02d45522-3952-11de-9d95-00144f2af8e8/Housing-at-its-most-affordable-level-for-more-than-six-years.jsp

inspector_monkfish

Dan: wrote: »

Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years.

According to the latest Halifax FTB Affordability Review, the house price to earnings ratio - a key affordability measure - is lower now than it has been for more than six years.

Furthermore, the house price to average earnings ratio has declined from a peak of 5.84 in July 2007 to an estimated 4.34 in March this year - a fall of 26 per cent.

http://www.ftadviser.com/FTAdviser/Mortgages/Products/FirstTimeBuyers/News/article/20090505/02d45522-3952-11de-9d95-00144f2af8e8/Housing-at-its-most-affordable-level-for-more-than-six-years.jsp

true.
but it doesnt actually mean that any of the poor [EMAIL="b@stards"]b@stards[/EMAIL] can still afford anything !!

Dan:_4

So, the average house price to average earnings ratio has came down from almost 6 to just over 4.

Almost back to some peoples expectations of 3.5x

ad9898_3

I haven't had chance to read it yet, but if this 'affordability' has anything to do with the current interest level, then I would say it's largely irrelevant. It is not possible to take a 25 year loan and base it on today's artificial interest rates, unless of course you get yourself a 25 year fix, and I bet a hefty sum that if such deals exist in the current climate, they will be way over 6%, with punitive charges if you wish to pull out of it.

If the article has nothing to do with the current interest rates, then forgive me Dan.

Dan:_4

inspector_monkfish wrote: »

true.
but it doesnt actually mean that any of the poor b@stards can still afford anything !!

Maybe the poor b@stards should think about re-training in something, instead of praying for house price falls?

ukcarper

I still can't understand this 3.5 figure

Dan:_4

ukcarper wrote: »

I still can't understand this 3.5 figure

It's a myth, dreamed up over at hpc.co.uk

lostinrates

Dan: wrote: »

It's a myth, dreamed up over at hpc.co.uk

I have no view either way really, or more accuartely opposing views of my own, but if its a myth why do Halifax have a FTB affordability review thats considered key and relates to multiples?

inspector_monkfish

Dan: wrote: »

Maybe the poor b@stards should think about re-training in something, instead of praying for house price falls?

err, yeah righto
that would be simple wouldn't it

there you go, problem solved

Phirefly

inspector_monkfish wrote: »

true.
but it doesnt actually mean that any of the poor b@stards can still afford anything !!

My best friend's buying his first house. They've paid £117000 for a 2 up 2 down in a pretty midlands market town. They put down 10% deposit and their mortgage is a little over 2x their joint income. He tells me they had no trouble finding a mortgage. I don't know what rate they've secured but they seem to be comfortable with their repayments.

Whether they are genius or foolhardy is not my concern or up for debate here. But I think it shows that the poor b@stards can afford it....

inspector_monkfish

Phirefly wrote: »

My best friend's buying his first house. They've paid £117000 for a 2 up 2 down in a pretty midlands market town. They put down 10% deposit and their mortgage is a little over 2x their joint income. He tells me they had no trouble finding a mortgage. I don't know what rate they've secured but they seem to be comfortable with their repayments.

Whether they are genius or foolhardy is not my concern or up for debate here. But I think it shows that the poor b@stards can afford it....

they are the fortunate ones, and good luck to them
there are many that still can't