Tuesday, May 5, 2009
Latest Halifax FTB Affordability Review
Home affordability for potential first-time buyers (FTBs) has reached its lowest level in more than six years. According to the latest Halifax FTB Affordability Review, the house price to earnings ratio - a key affordability measure - is lower now than it has been for more than six years. Furthermore, the house price to average earnings ratio has declined from a peak of 5.84 in July 2007 to an estimated 4.34 in March this year - a fall of 26 per cent. The proportion of disposable earnings devoted to mortgage payments - another affordability measure that includes the impact of interest rate changes - has also fallen significantly due to the combination of the decline in house prices and the cut in interest rates to record lows.