Hurrah. Housing is now more ‘affordable’ for first-time buyers than it was a year ago. Or so says Halifax, which has produced figures this morning showing that the average home now costs 6.7 times the earnings of the average worker, down from 7.3 times a year ago. This is thanks to two opposing trends. The value of the average home has come down from £293,586 to £286,276. Meanwhile, average earnings have increased by around 7 per cent.
Spot the missing factor from this analysis. Yes, that’s right: it’s interest rates
Spot the missing factor from this analysis. Yes, that’s right: it’s interest rates. Housing is only more ‘affordable’ now than it was a year ago if you are lucky enough to be able to buy without a mortgage or you have someone happy to lend you money privately, interest-free. For everyone else, buying a home is definitely not more affordable than it was last year.
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