Homes are now more affordable than at any point in the past six years
Statistics from the UK's largest mortgage lender have revealed that the cost of the average house is 4.42 times the average salary, which means that property in the UK now stands at its most affordable price in six years.
According to figures released by the Halifax, the average cost of a UK home is £160,327 after property prices decreased by a further 2.3% in February. House prices were also found to have fallen by just over 17% since February 2008.
The statistics mean that UK homes are now more affordable than at any point in the last six years because the average property now costs 4.42 times the average earnings. The last time that the house price to salary ratio was below this figure was back in February 2003, when the average cost of a UK home was 4.41 times the average earnings.
In order to calculate this ratio, the Halifax divide the average price of a UK property (currently £160,327) by the average earnings of a man in full-time employment, which today stands at £36,242.
The latest statistics will be of interest to potential househunters, particularly when compared to figures for July 2007, when a home cost 5.84 times the average salary.
Commenting on their findings, the Halifax said yesterday that this was a "tentative sign" that the housing market might be beginning to stabilise.
The Halifax's housing economist, Martin Ellis, said that the property price to salary ratio dropping to its lowest point for six years will make it easier for people to get on the housing ladder, as long as they have the funds for a fairly substantial deposit. He added that property is "quite a bit cheaper."
Similarly, David Hollingworth of London & Country mortgage brokers said that property now looked more affordable.
In other news, the Bank of England also found minor signs of stabilisation in the UK housing market, with their figures showing the same number of mortgage approvals granted in December 2008 and January 2009.
Source: Mail Online | Last updated: 6th March 2009
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