Saturday, Apr 18, 2009
Affordability at 25 year high?
This is Money: Homes are cheap, if you have £50k deposit
Homes are now more affordable than the 25-year average, a new report says, but an average buyer would need a £50,000 deposit to take advantage .Halifax's Affordability Review report, released today, says typical mortgage payments for a new borrower have fallen from a peak of 48% of earnings in September 2007, to 31% in March 2009. However the figures are based on a buyer with a 30% deposit.
Posted by little professor @ 11:21 AM (1006 views) Add Comment
7 Comments
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1. cyril said...
These affordability indices are a bit artificial - I wouldn't like to take a chance with a variable rate mortgage at the moment because interest rates can only really go up from here.
Interest on a 5+ year fixed rate mortgage is more like 5% (with a hefty deposit) which is about 50% more expensive than what is implied by the affordability index.
2. uncle tom said...
Cyril - agreed
The only affordabilty calculator that should be considered is the ratio of house prices to the income of the household's primary earner (not joint income - people tend to acquire things called babies..)
Affordability calculators based on first year interest payments only serve to decieve and mislead.
3. Dj2000 said...
Homes will also be cheap compared to a price higher than they have been!
"Homes are now more affordable than the 25-year average, a new report says, but an average buyer would need a £50,000 deposit to take advantage"
If you knock 50k off the price of a 120k 1 bed flat then yes 70k sounds affordable for a couple still doesn't make it value for money!
Bring on Ikea Homes
4. dj2000 said...
Homes will also be cheap compared to a price higher than they have been!
"Homes are now more affordable than the 25-year average, a new report says, but an average buyer would need a £50,000 deposit to take advantage"
If you knock 50k off the price of a 120k 1 bed flat then yes 70k sounds affordable for a couple still doesn't make it value for money!
Bring on Ikea Homes
5. taffee said...
so the problem was artificially high interest rates, and the solution,artificially high interest rates!
6. taffee said...
I meant artificially low
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