Mortgage more affordable says Halifax, reports London Mortgages brokers, London Mortgages Advices Tuesday, 24th August 2010

According to research carried out by Halifax mortgages are now twice as affordable as 2007.

They say that when compared to the peak of 2007t average mortgage is twice as affordable for borrowers today.

The research looked at lower house prices and record low interest rates. This meant that that the typical mortgage payment for a new buyer is now nearly half what it was three years ago.

Compared to 50% in June 2007, average monthly mortgage repayments in June 2010 accounted for 28% of disposable income.

An additional reason for this is that since the Stamp Duty threshold for first-time buyers was increased to £250,000, 94% are now exempt from this payment.

Lack of affordability as the main obstacle to getting a mortgage is cited by more than 50% of aspiring first-time buyers today with only 94,600 people getting their first home in the first half of 2010, compared with double that number in the corresponding period in 2007.

Lenders today demand bigger deposits and squeaky-clean credit records before agreeing to advance money to first-time buyers results in the lack of first-time buyer activity. In other words tighter mortgage criteria.

"We believe it’s important that first-time buyers understand that whilst there are still challenges in raising deposits, other market conditions are more positive. Affordability has significantly improved, meaning the amount of a typical first-time buyer’s monthly pay packet that needs to be dedicated to their mortgage is now below the 25 year average and importantly, despite perceptions, eight out of ten first-time buyer mortgages are approved.” Stephen Noakes, commercial director for mortgages, commented.