Halifax: Affordability in market is improving
Friday, 7th November 2008

Housing affordability is showing notable improvements, according to high street bank Halifax.

In its monthly house price index, the financial institution stated that house prices had declined by 2.2 per cent during October, taking the annual change to a drop of 13.7 per cent.

Halifax added that the house price to earnings ratio had also improved, with the figure falling by 16 per cent from its peak of 5.84 in July 2007 to 4.92 in August, dropping to the lowest figure it had been since February 2004.

Despite this, the bank emphasised that the drop in houseowners' spending power due to a fall in housing demand had a detrimental impact on the market.

The report said: "The decline in the availability of mortgage finance since the summer of 2007 has been a further constraint on the ability of potential homebuyers and homemovers to enter the market."

According to the Royal Institution of Chartered Surveyors, the data presented by Halifax showed increasing pressure on the housing market, with many lenders using the period to rebuild their margins.