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Mortgages getting more affordable for first-time buyers

Mortgages are now more affordable for first-time buyers than at any time in the last 12 years, according to research by the Halifax.

The proportion of disposable income needed by new buyers to make mortgage payments was 27% in September last year. That is the lowest percentage since December 1998 and just over half the peak level of 50% in September 2007.

Halifax say the dramatic improvement in affordability is due to lower house prices and declining mortgage rates.

Martin Ellis, housing economist at Halifax, said: "The 'noughties' were a difficult period for many looking to get on to the property ladder.

"The substantial rise in house prices over much of the decade prevented many potential first-time buyers from entering the market. However, affordability has improved significantly over the past three years.

"Whilst the tightening in lending criteria experienced across the mortgage industry since the onset of the credit crunch in 2007 deterred first-buyers from trying to secure mortgage finance, there are now encouraging signs of a modest improvement in mortgage availability."

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