Halifax: Housing Affordability is Improving, but Challenges Persist

According to Halifax, the largest mortgage lender in the UK, buying a home has become slightly more affordable for those with average incomes. Halifax reported that the ratio of average house prices to earnings has decreased from 6.62 last year to 6.55. Compared to a 3.8% increase in property prices over the past year, wage growth stood at 5%, outpacing house price inflation.

Earlier this month, Halifax stated that house prices have reached a record level, with the typical property now costing £293,999. "The drop in interest rates has led to a decrease in mortgage rates, and the ratio of mortgage costs to income fell from 33% last year to 29% this year," said Halifax. "Housing affordability has improved over the past year due to stabilizing property prices, strong wage growth, and easing interest rates. This is great news for first-time buyers and existing homeowners looking to remortgage or climb the property ladder," says Amanda Bryden, head of Halifax Mortgages.

However, Bryden also acknowledges that "the fact that prices are still near record levels and interest rates are higher than what we have become accustomed to over the past decade means that property purchase continues to pose a significant challenge for many." According to Halifax, Kingston upon Hull in East Yorkshire is the most affordable area for buying a home, while Elmbridge in Surrey is the least affordable area.