UK Housing Market Affordability Reaches Seven Year High
London, UK (PRWeb UK) 15th March, 2010 -- The most notable points taken from this latest research by Zoopla.co.uk are:
- 58% of homes are now affordable, up from just 34% three years ago
- Property prices are now more affordable than at any time since in 2003
- Average UK income earner can afford to buy 58% of UK properties
- Bradford is the most affordable market in UK, London least affordable
The average UK income earner can now afford to buy 58% of all homes, up significantly in comparison to the property market peak in 2007, when just 34% of homes were affordable. Over the past 10 years, affordability levels reached their highest point in 2002 at 66% and then fell steadily over the next 5 years. The current levels were last seen in 2003 when the affordability rate was 56%, leaving UK property (http://www.zoopla.co.uk/for-sale/) more affordable now than at any time in the past 7 years according to the Zoopla.co.uk research.
Zoopla.co.uk (http://www.zoopla.co.uk/) calculates the affordability rate using median incomes and average house prices in each geographic area along with prevailing mortgage rates. It judges a home to be 'affordable' if one third of the median income is sufficient to cover mortgage repayments. In 2002 using one third of income to meet mortgage repayments allowed a purchase of £118,934 whereas today, given the current low financing costs and increased incomes, the same proportion of income finances a purchase of £188,423.
In 2007, when house prices (http://www.zoopla.co.uk/house-prices/) and mortgage rates peaked, affordability rates nationally fell to record lows of 34%, resulting in the subsequent correction over the past couple of years to the more sustainable level of 58% currently. Across the UK, affordability rates vary greatly by area with the most affordable markets generally in the north and the least affordable in the south, despite the higher income levels.
Bradford (http://www.zoopla.co.uk/for-sale/property/west-yorkshire/bradford/) was revealed as the most affordable city in the UK where four out of five homes (82%) are affordable for residents on the average local income. Hull came in as the second most affordable with 81% of homes now deemed affordable, followed by Stoke-on-Trent (80%), Birmingham (78%) and Coventry (78%).
London (http://www.zoopla.co.uk/for-sale/browse/london/) tops the list of the least affordable in the UK by some margin in spite of having the highest median income in the land. Less than one third (32%) of homes are affordable for residents of the capital today, although this is a significant improvement on the low point reached in 2007 when a mere 11% of properties were deemed affordable. Southampton (44%), Bristol (53%), Norwich (58%) and Leicester (59%) were among the five least affordable markets in the UK.
Nicholas Leeming, Commercial Director of Zoopla.co.uk, commented: "Affordability rates have improved substantially over the past couple of years as a result of lower mortgage rates and falling house prices that have now begun to stabilise. We are at levels of affordability not seen in the UK housing market for almost seven years which makes it a great time to buy, especially if current low interest rates can be locked in by the borrower."
UK Market Data Tables (http://blog.zoopla.co.uk/2010/03/12/bradford-most-affordable-property-market-in-uk/) - Methodology: Calculated by Zoopla.co.uk as the proportion of properties where a third of median income in the selected market would be sufficient to cover mortgage repayments, based on prevailing mortgage rates and a 75% LTV mortgage payable over 25 years.
About:
Zoopla.co.uk (http://www.zoopla.co.uk/) is the UK's most comprehensive property website, focused on empowering consumers with the resources they need to make better-informed property decisions. Helping users make sense of the residential property market by combining property listings with market value data, local information and community tools. Founded on the principles of transparency and efficiency, everything we do aims to make the market more effective for both property consumers and professionals alike.
By combining free, instant value estimates for every UK home with sold prices, local market information and hundreds of thousands of properties available for sale and to rent, Zoopla.co.uk has become the ultimate destination for property consumers to search for property and do their market research. Zoopla.co.uk are the UK's fastest growing property website and are proud to have been named 'Best Property Portal 2009' (Daily Mail UK Property Awards).
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