First time buyer mortgages are now affordable in nearly a quarter of local authority areas in the UK, the latest Halifax First Time Buyer Annual Review shows.
Compared to 2007, when first time buyer mortgages were deemed affordable for those on average earnings in just six per cent of the UK's areas, the index shows it "improved significantly" last year, with four in 10 areas becoming affordable between 2008 and 2009.
Depressed house prices and record low interest rates have seen the proportion of disposable income spent on mortgage payments, by potential first time buyers on national average earnings, fall from 50 per cent in June 2007, to 27 per cent by November 2009.
The current level is even lower than the 34 per cent average over the past 25 years, offering hope to first time buyers who have been struggling to get on the property ladder since lenders tightened their criteria due to the credit crunch.
Lower house prices and higher levels of affordability are joined by increased availability of mortgages, following a 33 per cent rise in the number of deals on the market from 1,209 in April 2009 to 1,610 in December.
Commenting on the figures, Martin Ellis, housing economist at Halifax, said that while affordability has improved "substantially" for first time buyers, they are not out of the woods and into their new home just yet.
"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," he said.
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