Homes for FTB's at most affordable in 10 years

Graham_Devon

Due to stagnant property prices, the Halifax suggest that homes for FTBs are now at their most affordable for 10 years.

Which is obviously a good thing and something many of us have been hoping for.

But the 10 year thing does mask a continueing problem. It's based on the fact that if buyers can stretch to 4x income, 54% of areas were deemed to be affordable. This is the highest since 2002, when 64% of areas were deemed affordable (so some way to go to beat a 10 year history).

So that's just half of the country deemed to be affordable at 4x income. It doesn't state what income is, so it could be dual, it could be sinle, it could be based on silly median full time figures which the majority don't earn.

The top 5 most affordable places were in Scotland.

91% of the affordable places are in the North, while only 9% of affordable places are in the south.

And the calculations:

Districts were deemed "affordable" if the average house price for a first-time buyer there was lower than what someone on typical earnings living there could pay. Local average earnings were multiplied by four and if the average price paid by a first-time buyer was lower than this sum, it was classed as affordable.

The Halifax do point out that just because it's more affordable on paper, it doesn't mean it's easier to buy, due to the changing landscape.

For instance, the average deposit used to make the figures work is £27,857.

Graham_Devon

And having just looked at thisismoney, they are running a stroy which appears to completely disagree with the Halifax stuff.

One in three first-time buyers is now over the age of 35 – compared to one in ten a decade ago.
The huge increase highlights the struggle young people face as they try to get a foothold on the housing ladder.

According to the Government’s English Housing Survey, 32.3 per cent of first-time buyers were aged 35 and over between 2008 and 2011. Of this number, 6.5 per cent were in their late-40s and early-50s.

Yorkie1

They're not really contradicting themselves.

Halifax are talking about income vs mortgage payments once you've got the necessary deposit. They concede that a big deposit is still a stumbling block.

Thisismoney is just providing the deposit part of the jigsaw.

coastline

I noticed an ex local authority house nearby.. a year or so ago was struggling to sell...despite it being reasonably priced...
It had plenty of scope for some improvements...eg conservatory in a sunny position etc...yet there were hardly any viewers...I thought it was ideal for a FTB yet it eventually sold to a BTL...
I've guessed the payments would have been under £600 a month...this kind of thing makes me think young people must be really struggling...
The government like to release the unemployment figures to the media at 2.5m...but what they don't tell you is theres 2m in further education...around three times as many in a decade..
Then of course theres job security to consider...what kind of contracts are young people on...a bit more than generation ago people jumped into employment straight from school...
Looks like more of the some unless theres a boost in the economy..

Blacklight

The average person on the average income can't buy a house in the average area at the long term average multiplier.

*yawn*

When you going to learn Graham there's no such thing as average.

chewmylegoff

Houses aren't affordable if you don't meet the criteria for borrowing the money to buy them. If your cant afford the mortgage you can't afford the house, whether it not you get a relatively low number when you divide the price of the house by your salary.

ukcarper

This is going the same way as the other thread. The way I read it is that all they are saying is that house are more affordable than they have been since 2002 not that they are affordable to everyone. If they use the same method to measure affordability it doesn’t really matter what salary they use.

mystic_trev

What the article should say is that Homes are at most affordable levels if mortgages were still available at 2007 criteria.

Fella

Affordability is a scam term various VIs like to use when describing house prices. They don't want to call them "F***ing expensive" so they call them affordable instead. A classic bit of doublespeak really.

snooping_around

...........

ukcarper

Prices are high now but in relation to wages they have been higher in the past and need to drop less than 20% to get to long term average.
Prices have always been high in London I had to move 30 miles out in the 70s.