Saturday, April 18, 2009

Affordability at 25 year high?

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 (1369 views)
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6 thoughts on “Affordability at 25 year high?

  • 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.

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  • 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.

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  • 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

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  • 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

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  • so the problem was artificially high interest rates, and the solution,artificially high interest rates!

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  • I meant artificially low

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