Housing More Affordable Than A Year Ago, The Halifax Says
Housing is more affordable than a year ago, according to the UK's biggest mortgage lender, but high mortgage rates mean it is still a stretch.
The Halifax, part of Lloyds Banking Group, said that a typical home in the UK cost 6.7 times average annual earnings of a full-time worker.
This is down from 7.3 times a year ago, which was a record level.
The lender said that house prices had fallen in the last year, while earnings had risen.
However, a typical home is still less affordable than it was near the start of the pandemic, and mortgages are taking up a bigger chunk of incomes.
The building society said that mortgage costs typically accounted for 35% of a homeowner's income, up from 30% in a year and not far short of the level seen at the start of the financial crisis in 2007.
"The sharp rise seen in interest rates over the last year has meant the sums now look very different for both homebuyers and those looking to remortgage," said Kim Kinnaird, mortgages director at the Halifax.
"Typical monthly mortgage payments are up by around a fifth, which is a big jump at any time, but particularly during a wider cost of living squeeze."