Homes more affordable as supply slumps

 
Tim Wallace
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HOMES are at their most affordable level for 14 years, according to data released today by Halifax, while figures from Rightmove suggest very low housing supply will prevent the market falling further.

First-time buyers spent 27 per cent of their disposable income on their mortgage, down from the 37 per cent average seen over the last 27 years, Halifax revealed. Payments peaked at 47 per cent of disposable income in the third quarter of 2007.

“The prospect of an exceptionally low Bank of England Bank interest rate over the foreseeable future should maintain affordability at favourable levels in 2012,” said Halifax economist Martin Ellis.

Meanwhile Rightmove data showed average asking prices rose 1.2 per cent in the first week of 2012, though prices remain down 0.8 per cent on the month.

London house prices rose by 0.8 per cent on the month and 6.1 per cent on the year, reaching an average of £413,259.

Estate agents are currently marketing less than one new property a week – the lowest rate ever seen, supporting prices.

Top countryside houses also saw prices rise, according to the Knight Frank country house index.

Houses worth more than £5m experienced a 0.2 per cent rise on the quarter and 1.3 per cent on the year, with country houses as a whole down 1.7 per cent last quarter.

Meanwhile a survey from spareroom.co.uk showed 59 per cent of landlords no longer take housing benefit tenants, with 87 per cent reporting problems with payment from such tenants.