First-time buyers 'will benefit from house price falls'

The affordability of housing was boosted across 2008, according to Halifax.

New data from the mortgage lender shows that the house price to earnings ratio - a measure of property affordability - stood at 4.56 last month.

This is well down on July 2007's pre-credit crunch high of 5.84 - and is also the lowest measured in the UK for around five years.

Since the onset of the credit crunch last summer, house prices have fallen by approximately 15 per cent.

This has not led to a rush to buy, however, due to the economic downturn caused by the crunch squeezing people's budgets and the crunch itself restricting the provision of cheap loans from mortgage lenders.

Martin Ellis, chief economist at Halifax, commented: "There has been a marked improvement in housing affordability in many parts of the UK. First-time buyers, in particular, are benefiting, especially outside the south of England and the Midlands.

"We expect this trend to continue in 2009."

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2008-12-31 13:13:06 © Moneyextra.com