Mortgages more affordable, and more people buying

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Three news stories in the last couple of weeks have painted a very favourable picture for the UK housing market.  Research has shown that: mortgage affordability is at its highest since 2007; more people are moving than in the last 10 years; and buying is overtaking renting in popularity.  But why the big improvements and who is it good news for?

Mortgage Affordability

Mortgage affordability has soared since 2007, with loan repayments now taking up less than a third of homeowners’ disposable incomes.  Just 29% of a typical person’s take-home pay was spent on mortgage repayments in the fourth quarter of 2017, while it was closer to 48% ten years ago.  The improvement has mostly been driven by the significantly lower mortgage rates we are still seeing.

Andy Bickers, mortgage direct at Halifax, said: “This is a real boost for both those who already have a mortgage and those preparing to take their first step on the property ladder.”

Buying vs Renting

Recent research by AA Mortgages suggests that buying a home is set to be more popular than renting in 2018.   The study found that almost a quarter (24%) of those surveyed in the UK are planning a move in the next two years, with a greater number of people planning to buy (46%) rather than rent (42%) their next property.  In fact, nearly a quarter of those currently renting (24%) are planning to purchase a new home rather than renting again.

Again, favourable mortgage rates look like the main cause for this change, and it’s pretty much the same story in all areas of the UK.

More people moving home

According to new research by Lloyd’s Bank, the number of people moving home at any one time, has now reached its highest level in 10 years.

The number of UK home movers (that is, those who are moving from one owned property to another rather than first-time buyers) increased by 2% to an estimated 370,300 in the past year, which is a massive 18% up on the same period in 2009.

With all of these positive signs, 2018 is expected to be a great year for the housing market.