Some light is on the horizon for first time buyers struggling to get their first foot on the property ladder.
Mortgage affordability for those looking to take their first steps onto the property ladder is at its ‘most favourable’ for 12 years, so says the latest annual Halifax First Time Buyer Review.
It says the proportion of disposable earnings devoted to mortgage payments by a potential first time buyer stood at 27% in September 2010; the lowest since December 1998 and almost half the peak level witnessed in September 2007.
First time buyers have become steadily marginalised since the property crash of 2008 but this significant improvement in affordability over the past three years has been mainly driven by a combination of lower house prices and declining mortgage rates.
In 2010, 40% of local authority districts across the UK were 'affordable' for the average first time purchaser, a considerable improvement from 2007, when only 6% of areas were affordable, revealed Halifax.
Meanwhile the house builder Barratt Homes has linked up with a lender to offer parents of first time buyers loans of up to £50,000, in order to help their off-spring buy a new Barratt property.
It’s specifically designed to address the current mortgage restrictions and will open up a new door to the thousands of first time buyers who do not have the 20-25% deposit currently required to get on the ladder.