Average Buyers Still Unable To Afford Property
January 21, 2010
It has been revealed that the average buyer may still find that property prices are out of their reach, with house prices becoming unaffordable again for the first time since the property slump began at the end of 2007, according to a recent report.
Prices are said to be moving out of the reach of many average buyers once more, with affordability having been falling since around the middle of this year when house prices began to see moderate increases again following a series of month on month falls.
With pay freezes also expected to continue into next year the figures have shown that house prices increases are now ahead of increases in household disposable income once again, making the prospect of purchasing a home impossible for many would be buyers.
Many thought that it would be years before the property market started to pick up when house prices first began to fall, but it is thought that various initiatives including government schemes have helped to speed up the process.
In some areas such as the city house prices have gained momentum far faster than in other areas, which has made affordability in some parts of England and Wales far less likely than in other parts.
Another restriction that average buyers are facing when it comes to affordability is the high level of deposit that lenders are now demanding, making it difficult even for those with an adequate income if they do not have the necessary deposit.
One economist, Melissa Kidd, stated: “Affordability has now peaked. The major effect driving that is that house prices have risen quite quickly. Disposable income is up as well, while mortgage rates are low.”
She added: “We’ve had this huge boost to disposable income from low rates, but there’s not much to see what could drive prices much higher next year. We expect low single digits rises in prices in 2010. “
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- Getting a mortgage still a struggle for first time buyers Officials from a leading mortgage broker have said that many first time buyers in the UK are still struggling enormously when it comes to getting a mortgage loan. Industry experts from John Charcol have said
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