UK mortgage payments more affordable now, study says

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Mortgage payments in the UK have reached their most affordable levels in 14 years, according to research from Halifax.

The average mortgage payments for new borrowers, which include first-time home movers and buyers, stood at 27 percent of disposable income in Q4 last year.

This is the lowest level since spring 1997’s 26 percent and is significantly below the 37 percent average over the past 27 years.

In Q4 2011, Scotland had the most affordable residential properties on a regional basis, with payments accounting for 20 percent of disposable earnings, against London, where payments make up 35 percent of take-home pay.

Nationwide, mortgage payments as a proportion of income have nearly halved from the 48 percent recorded during their peak in 2007, as home prices have declined along with mortgage rates.

“The falls in house prices and cuts in mortgage rates in the last few years have resulted in a significant improvement in housing affordability for those able to raise the necessary deposit to enter the market,” said Martin Ellis, Housing Economist at Halifax.

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