Monday, Sep 14, 2009
Lower house prices have not meant improved affordability
Knight Frank: Affordable Housing Review 2009
90% of UK households are potentially eligible to access state aid to cover their housing costs. In the UK, £60,000 of household income is now the accepted limit for eligibility for access to most shared ownership schemes. Lower property prices have not meant improved affordability. Despite house prices falling by 15% or 20% on average, the proportion of a buyer’s income required to secure a mortgage, has only come down 1% - 24% of a buyer’s income was required to secure a mortgage at the peak in 2007 and now it has only come down to 23% by mid 2009, despite the fact they need to secure larger deposits than in the past.
Posted by wanderinman @ 08:15 PM (368 views) Add Comment
4 Comments
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1. Bulboy said...
Right, so for me to secure a mortgage and part with 23% of my take home on a monthly basis (after taxes and benefits sacrifice) that means 400 pounds a month. For this money am I looking at 100000 max repayment mortgage at 5-ish% a year (gestimate) or should I go with interest only where I can (if I put down a hefty deposit) take a 250+k mortgage. . And I am very close to the 40K a year, still do not think I can afford a house at THIS time. I think I will stick rented (at 585 for 2 beds with garden, only 35 mins from Central London on the train, expenses paid)
2. sneaker said...
According to top estate agents two years ago, a £1m house was "affordable housing".
Take it all with an enormous pinch of salt.
3. will said...
What an indictment on the affordabilty of housing in the UK. An 80% tax on second homes or those bought as an investment would do it.
4. Rk said...
Doesn't £60,000 household income put you into the top 10% of earners? What does that imply about house prices if you've got to be earning more than 90% of the population before you can afford a house without special support?