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Mortgages at their most affordable for a decade

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The proportion of our disposable income that we put towards our mortgage repayments is at its lowest level in ten years.


Mortgage payments account for just 28% of income on average according to new research from Halifax.

The study suggests mortgages are now at their most affordable in a decade, and have fallen drastically from a peak of 48% of income in 2007.

The average monthly mortgage payment now stands at £580, with an average monthly take-home wage of £2,062.

Regional differences

Current mortgage payments as a proportion of earners are now lower in all regions of the UK than the long-term average.

However, some regions have benefitted more from lower mortgage costs than others. Payments as a proportion of income have fallen to less than 25% in Northern Ireland, Scotland, Yorkshire and the Humber in the North West.

In contract, they are at 34% in the South East, 35% in the South West and 36% in Greater London.

The ten most affordable local areas

Let’s take a look at exactly which areas are the most affordable to buy a house.

Local Authority District

Region

Mortgage payments as % of disposable earnings

Copeland

North West

14.9%

West Dunbartonshire

Scotland

17.6%

Hyndburn

North West

17.9%

Renfrewshire

Scotland

17.9%

North Ayrshire

Scotland

17.9%

Kingston upon Hull, City of

Yorkshire and The Humber

18.0%

South Ayrshire

Scotland

18.0%

North Lanarkshire

Scotland

18.2%

Glasgow City

Scotland

18.3%

South Lanarkshire

Scotland

18.3%

So seven of the ten most affordable places to buy a property are found within Scotland, with the rest all found in northern England.

The ten least affordable local areas

Local Authority District

Region

Mortgage payments as % of disposable earnings

Camden

London

56.5%

Cambridge

East

50.5%

Hammersmith and Fulham

London

50.3%

Mole Valley

South East

50.1%

Brent

London

49.7%

Oxford

South East

49.4%

Richmond upon Thames

London

47.6%

Harrow

London

47.3%

Chiltern

South East

46.7%

Haringey

London

46.3%

No surprises here, with all of the most expensive places to buy found within London and the South East, bar Cambridge.

What about availability?

It’s all very well mortgages getting cheaper, but that’s not much use if you can’t actually get your hands on them. So what’s mortgage availability like?

The most recent breakdown from the Council of Mortgage Lenders covers the mortgage market in November. During that month there were 52,700 loans handed out for home purchase, up by 6.3% from the previous month and 12.6% year-on-year. Most encouraging of all was the first-time buyer picture – 21,700 mortgages granted, a year-on-year increase of a whopping 24%.

And that’s only likely to continue as low mortgage rates, caused by the Government’s Funding for Lending scheme, entice more buyers into taking the plunge.

What do you think? Has your mortgage become more affordable? Do you think this trend will continue? Let us know your thoughts in the comment box below.

Get free mortgage advice from Lovemoney mortgages

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article.

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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Barclays Family Springboard: buy a house with 5% deposit

The best new mortgages for 2013

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Overpay your mortgage and save thousands

Interest-only mortgages: the banks that will still lend

Save £1,000+ by remortgaging

Five mistakes that mean you'll get the wrong mortgage

Is it worth going to a mortgage broker?

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What is a shared equity scheme?

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