Residential property in the UK now more affordable, research shows

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UK property now more affordable

Residential properties in Britain’s biggest cities more affordable according to research from the Halifax that shows how prices have changed between 2007 and 2010.

The general fall in house prices between 2007 and 2010 has improved affordability across Great Britain and increased the choice of property available to prospective homebuyers.

Based on Halifax’s own data, £150,000 could now purchase a semi-detached property in five out of the ten largest British cities, compared to just one at the end of 2007. For those further up the property ladder, a budget of £250,000 could now buy all property types in half of the 10 biggest cities in Great Britain, compared to two in 2007. London is the only major British city where the average price of all property types remains above £250,000.

Other findings from Halifax’s research reveals that over the last three years, property prices in towns located in southern England have generally outperformed the rest of the country.

Seven of the ten post towns with the highest house price growth since 2007 are in the south of England. The Wiltshire town of Westbury recorded the biggest increase in house prices, with the average house price increasing by 8.9% between 2007 and 2010. Shetland in Scotland at 5.1%, and Barnstaple in Devon at 4.2% were the next best performers.

In the North, Altrincham at 3.3% and Northallerton at 3%) were among the ten best performers. In contrast, the eight towns that saw the biggest house price falls since 2007 are all in the North. The South Tyneside town of Jarrow saw the biggest fall, where the average house price fell by 31.4% over the period. Outside the North, Maidenhead in the South East recorded the largest house price decline of 27.1%.

‘The higher performance of the housing market in southern England over the last three years reflects the stronger economic performance of this part of the country compared with the rest of the UK. Looking forward nationally, we expect limited movement in house prices overall this year but with the risks on the downside,’ said Martin Ellis, housing economist at the Halifax.

While only 6% of the towns surveyed seeing a rise in house prices over the past three years, Ellis suggests that opportunities remain for both homeowners and prospective buyers. ‘It is important to remember that those buyers who bought their home five or more years ago are likely to still have a healthy level of equity in their property. On the buyer side, monthly mortgage costs have now nearly halved from their peak in 2007, when 50% of a typical first time buyer’s income was devoted to paying their mortgage,’ he be explained.

In separate research using figures from the Bank of Scotland, part of the Halifax, £150,000 could now purchase a flat or terraced house in Glasgow, compared to just flats at the end of 2007.

For those further up the property ladder in Scotland, a budget of £250,000 could now buy flats and semi detached properties in Edinburgh, compared to only flats in 2007.

Over the period that was an average decline in Scottish house prices of 15.2%. Renfrew saw the biggest price decline at 30.5%, in Scotland and third largest decline in Great Britain.

‘Scottish house prices have generally remained quite subdued since 2007, albeit with some exceptions such as Shetland. Across Britain the higher performance of the housing market in southern England over the last three years reflects the stronger economic performance of this part of the country compared with the rest of Great Britain,’ said Ellis.

‘Despite this, opportunities remain for both homeowners and prospective buyers. It is important to remember that those buyers who bought their home five or more years ago are likely to still have a healthy level of equity in their property. On the buyer side, monthly mortgage costs have fallen significantly from their peak in 2007, when 38% of a typical first-time buyer’s income in Scotland was devoted to paying their mortgage,’ he added.

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