Mortgages have fallen to their most affordable level since the twentieth century, according to a new survey.
The Mortgage Affordability Review by Halifax has revealed that mortgages reached their most affordable level since 1999 during the second quarter of 2013.
Rates have tumbled following the launch of the government’s Funding for Lending Scheme, causing a horde of new and existing homeowners to pursue better deals.
According to the Halifax review, payments now account for just over a quarter of a new borrower’s income (27%), compared to almost half (48%) just six years ago. As a proportion of earnings, mortgage payments have halved in more than 20 areas.
Camden, in north London, was identified as the least affordable district, where mortgage payments still consume over half the average income (53%).
Record-Low Rates
Mortgage rates are currently at record-low levels, even dipping below 1.50% for those with large deposits (West Bromwich Building Society [1.48%] / HSBC [1.49%]).
Craig McKinlay, director of mortgages at Halifax, said that government schemes directed at the housing market had been instrumental in improving conditions for consumers.
"The Funding for Lending scheme has helped lenders to cut mortgage rates, causing a further modest improvement in affordability over the past year, despite the modest rise in house prices nationally," he said.
"Substantial mortgage rate reductions and lower house prices have led to a significant improvement in mortgage availability since the peak of the housing market six years ago."
Keith McDonald
Which4U Editor
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