'More areas' affordable for first-time buyers

[dutchman]

Property is now affordable for first-time buyers in nearly four out of 10 areas of the UK, research indicates.

Someone on average earnings could now afford the average first-time buyer property in 39% of local authority districts, the Halifax bank said.

In 2007, the year in which house prices peaked, homes in only 6% of areas were affordable for average earners.

The improved affordability has come about through a combination of lower interest rates and house price falls.

However many first-time buyers have been unable to take advantage of the situation because of tighter lending criteria imposed by banks and building societies.

London problems persist

For most of 2009, the average person buying their first home with a mortgage put down a deposit of 25%, figures from the Council of Mortgage Lenders show.

Martin Ellis, housing economist at Halifax, said: "Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years.

"The tightening in lending criteria over the past two years is, however, making it very difficult for some to take advantage of lower property prices and mortgage rates."

The largest increase in the proportion of local authority areas where homes are now affordable for first-time buyers is in north-east England.

But in both London and Northern Ireland, the average first-time buyer property remains unaffordable for someone on average earnings in all local authority areas.

The average price of a property bought by a first-time buyer was £133,794 during 2009 - 10% lower than in 2008.

And first-time buyers borrowed an average of about £104,000 in 2009, putting down a deposit of £29,439.