The number of local authority’s (LA) where the average property bought by a first-time buyer (FTB) is affordable for someone on average earnings has more than doubled from 18 in 2007 to 57 in 2008 according to new data from the Halifax.

In its first review assessing the affordability of housing for first-time buyers (FTBs) across the UK, Halifax found the house price to earnings ratio – a key affordability measure – has improved significantly over the past 18 months. The ratio has fallen from a peak of 5.84 in July 2007 to 4.56 in November 2008, taking it to its lowest level for more than five years (July 2003: 4.54)

Housing is most affordable for FTBs in Scotland and Yorkshire and the Humber
The largest increases in the number of LAs that have become affordable for FTBs between 2007 and 2008 are in Scotland (from 30% to 67% of LAs) and Yorkshire and the Humber (from 0% to 40%). There have, however, been no increases in London, South West, West Midlands, Wales and Northern Ireland where the average property bought by a FTB remains unaffordable for someone on average earnings in all the LAs surveyed.

However, there have been no increases in the number of affordable LAs in London, South West, West Midlands, Wales and Northern Ireland where the average property bought by a FTB remains unaffordable for someone on average earnings in all the LAs surveyed.

Martin Ellis, chief economist at Halifax, commented: “There has been a marked improvement in housing affordability in many parts of the UK. First-time buyers, in particular, are benefiting, especially outside the south of England and the Midlands. We expect this trend to continue in 2009.”

In the Halifax survey, a local authority is classified as affordable if the average house price for a FTB in the LA is lower than the price someone on average earnings in the area can pay based on the historical average house price to earnings ratio of 4.0.