Falling house prices and record low interest rates have made buying a home more affordable now than any time in the past 12 years, a report has revealed.
A typical first-time buyer or home-mover had to spend 28% of their disposable income keeping up with mortgage payments in the second quarter of 2011, according to research by the Halifax.
This is the lowest level since 1999 and down by almost a half from the peak in the third quarter of 2007 when homeowners had to spend 48% of their disposable income on their mortgage payments.
Typical mortgage payments on new homes have been brought down after interest rates fell to an average of 3.85% from 5.84% in 2007 and house prices dropped from their pre-recession peaks.
The report found that affordability is now better than its long-term average in all 12 regions in the UK.
Mortgage payments account for the lowest proportion of disposable income in Scotland, where they come in at 22%. It is closely followed by Yorkshire and the Humber and the North West where the figure rises to 23%.
Six of the 10 most affordable districts are in Scotland. East Ayrshire is the most affordable in the UK, with mortgage payments accounting for just 17.7% of local average earnings.
Kensington and Chelsea were the least affordable districts, where higher house prices meant average mortgage payments accounted for 75% of local earnings. Mole Valley in Surrey and South Buckinghamshire were also among the least affordable.
Martin Ellis, housing economist at the Halifax, said: "Lower house prices and reduced mortgage rates have resulted in a substantial improvement in housing affordability since the peak of the housing market in 2007.
"These affordability gains together with a slowly improving economy should help support demand in the face of pressures from weak earnings growth, relatively high inflation and higher taxes."
