Fall in house prices lets in new buyers

LOWER house prices and falling interest rates have made homes significantly more affordable for first-time buyers in the past 12 months, according to the Halifax.

The average price paid by a firsttime buyer in 2009 was affordable in nearly 40 per cent of local authority districts, compared with 24 per cent in 2008 and just six per cent in 2007.

However the figures, revealed in this year's Halifax First-Time Buyer Annual Review, belie the fact that tighter lending criteria brought in by banks since the financial crisis have made it tougher for first-time buyers to obtain home loans.

Martin Ellis, housing economist at Halifax, added: "Mortgage payments in relation to earnings are significantly below the average during the past 25 years"