Falling house prices may mean tens of thousands of young working households are able to buy a home this year for the first time, a report says.
The analysts Hometrack say a 10% fall in prices will enable a fifth of those currently priced out of thhe market to buy a two- or three-bedroom home.
Their report says 28% of young people in work in the UK are unable to buy even their cheapest local properties.
The situation is worst in London, followed by south-west England.
The most affordable part of the country for home buyers is the North East where only 17% of young households are priced out of home ownership.
If, as some have predicted, prices fall by 10% or more this year, then the proportion of young working households priced out of home ownership would drop by a fifth to 22.5%, Hometrack said.
The figures are based on an analysis of the property market by Professor Steve Wilcox of York University.
However, Professor Wilcox warned that the current mortgage shortage would still be an obstacle for many would-be buyers.
"While house prices are falling, access to the property market is being increasingly limited by the costs and more restrictive terms of a substantially reduced supply of mortgage finance," he said.
According to his analysis, the cost of repaying a mortgage rose by 12% last year, which meant in turn that the cost of paying back a home loan rose to 34.5% of average incomes for first-time buyers.
That was higher than in 1990, at the peak of the house price boom at the end of the 1980s.
The relative cheapness of renting compared with buying has changed little in the last year, the report suggests.
In 2006, average rents, for a young household on average incomes, were two-thirds of the cost of buying a two- or three-bedroom home with a 100% mortgage.
Last year that ratio had moved up slightly to 68%.
The main reason for renting becoming cheaper than buying in the past few years has been the rapid growth of the buy-to-let market, which has led to nearly three million homes now being available to rent.
Date: 1st, October, 2008
Author: Ben Wilkie
ADVICE TO READERS
While this website is checked for accuracy, we are not liable for any incorrect information included. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions.
Enter your postcode here to find out how much your property is worth, based on Land Registry data.
Enter the following information to calculate the amount you can borrow.
First Income: |
|
Second Income: |
|
RSS Feed
Delicious
Digg
reddit
Facebook
StumbleUpon