Monday, April 20, 2009

Latest Halifax residential property review

Housing at its most affordable for almost seven years

Falling house prices and shrinking mortgage rates mean home affordability has improved significantly since mid-2007, according to a new Halifax review. According to the Halifax, house prices across the UK fell by an average of 16 per cent in 2008 and are expected to decline again in 2009, making it easier for borrowers to get on the property ladder. At the same time, the proportion of disposable earnings devoted to mortgage payments, a key affordability measure, has also fallen significantly over the past 18 months. Across the nation, typical mortgage payments for a new borrower have fallen from a peak of 48 per cent of average disposable earnings in the third quarter of 2007, to 31 per cent in Q1 2009.

Posted by jack c @ 03:34 PM (1519 views)
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8 thoughts on “Latest Halifax residential property review

  • “Prospective homebuyers should factor the likelihood of further house price falls into their calculations when deciding whether or not to buy.”

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  • More spin by the lenders. House prices in the UK are set by the banks, many of whom can’t run themselves, so why should we trust any data they produce. They invented Buy to Let – says it all really.

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  • @Paul
    I agree

    They should also factor in interest rate rises, those variable rates will look a whole lot less appealing if interest rates hit 15%.

    Then factor in tax, fuel, energy rises and the affordability goes out the window.

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  • The figures focus only on monthly payment and DELIBRATELY downplayed the HUGH increase in deposite requirement from 10% to 25%. Well, in the same way, Halifax can augre that if all properties in the UK have to be bought by CASH, since there will be no monthly payment, the UK property market will be most affordable then!

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  • Until_inflation_hits says:

    Hardly affordable anyway, no where near £105k mean selling price “expected”, even ignoring the inevitable interest rate rises following this DCB/ bull trap/ price rise mirage … quite a trap opportunity for the sheeple though.

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  • Good point peter_2008. How do they factor the hefty deposit into the calculations?

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  • Roll up roll up these BTL investment flats at BOGOF prices compared to 2007, only a fool would not buy now.

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  • These calculations are just wrong, blatantly wrong. Any economist with any self-respect would tell you. Saying that the first month of a mortgage is more affordable is not the same thing as saying that a mortgage is more affordable, you have to look at the net present value of mortgage over the life of the loan and compare that to income. As the prospects for income growth have cratered over the past year, the real cost of mortgages as a proportion of your lifetime income has skyrocketed. Saying housing is more affordable is blatant nonsense. How can the people who come out with these lies live with themselves?

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