Research from Halifax has revealed that housing affordability has more than trebled since 2007.
Dwindling house prices and falling interest rates have led to a sharp increase in the affordability of property in the UK, according to Halifax.
The bank revealed that the proportion of local authorities in the country where housing is affordable for a first-time buyer has increased more than three-fold since 2007. More than one in five local authority areas were classed as "affordable" in the first three months of 2009, up from just one in sixteen during the third quarter of 2007.
Halifax defines a local authority as affordable if the average house price for a first-time buyer is less than the price someone on "average earnings" in the area can pay, based on a house price to earnings ratio of 4.0. The house price to earnings ratio is now at 4.34, its lowest value in more than six years and 26 percent down on July 2007.
However, Halifax housing economist Martin Ellis warned against over-optimism, adding that conditions "are likely to be tough" for the rest of the year. "Increasing unemployment, low consumer confidence and the constraining effects of the continuing dislocation of the financial markets on the availability of mortgage finance are all likely to exert downward pressure on the market over the coming months," he said.
