The average UK income earner can now afford to buy 58% of all homes, up significantly in comparison to the property market peak in 2007, when just 34% of homes were affordable.
Over the past 10 years, affordability levels reached their highest point in 2002 at 66% and then fell steadily over the next five years. The current levels were last seen in 2003 when the affordability rate was 56%, leaving UK property more affordable now than at any time in the past seven years.
Zoopla said it calculated the affordability rate using median incomes and average house prices in each geographic area along with prevailing mortgage rates. It judges a home to be "affordable" if one third of the median income is sufficient to cover mortgage repayments.
In 2002 using one-third of income to meet mortgage repayments allowed a purchase of £118,934 whereas today, given the current low financing costs and increased incomes, the same proportion of income finances a purchase of £188,423.
In 2007, when house prices and mortgage rates peaked, affordability rates nationally fell to record lows of 34%, resulting in the subsequent correction over the past couple of years to the more sustainable level of 58% currently. Across the UK, affordability rates vary greatly by area with the most affordable markets generally in the north and the least affordable in the south, despite the higher income levels.
Bradford was revealed as the most affordable city in the UK where four out of five homes (82%) are affordable for residents on the average local income. Hull came in as the second most affordable with 81% of homes now deemed affordable, followed by Stoke-on-Trent (80%), Birmingham (78%) and Coventry (78%).
London tops the list of the least affordable housing markets in the UK by some margin in spite of having the highest median income in the land. Less than one third (32%) of homes are affordable for residents of the capital today, although this is a significant improvement on the low point reached in 2007 when a mere 11% of properties were deemed affordable. Southampton (44%), Bristol (53%), Norwich (58%) and Leicester (59%) were among the five least affordable markets in the UK.
Nicholas Leeming, Commercial Director of Zoopla, said: "Affordability rates have improved substantially over the past couple of years as a result of lower mortgage rates and falling house prices that have now begun to stabilise. We are at levels of affordability not seen in the UK housing market for almost seven years which makes it a great time to buy, especially if current low interest rates can be locked in by the borrower."
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