Scope widens for first-time buyers

The share of UK towns and cities that are affordable to first-time buyers is at its highest in a decade due to the sluggish housing market, a study has found.

Those taking their first step on the property ladder will find homes within their means in 54% of local authority districts, the highest proportion since 2002 when 64% of districts were within buyers' reach, according to Halifax.

This is up from 40% a year ago and almost eight times the proportion of affordable districts at the peak of the housing market in 2007, when just 7% were in this bracket.

A widening north-south divide was highlighted, with London being the only region where there were no affordable areas found for would-be buyers on average earnings. By contrast, 100% of districts in the North East were within buyers' grasp.

Just 9% of the affordable districts are in the South East, the South West or the East of England, compared with 15% 10 years ago. This means 91% of the affordable districts are in the North East, North West, Yorkshire and the Humber, East Midlands, West Midlands, Scotland, Wales or Northern Ireland, up from 85% in 2002.

Districts were deemed "affordable" if the average house price for a first-time buyer there was lower than what someone on typical earnings living there could pay. Local average earnings were multiplied by four and if the average price paid by a first-time buyer was lower than this sum, it was classed as affordable.

The study warned that aspiring home owners still face "significant hurdles" amid the uncertain economy.

Lenders have been tightening their loan criteria and the Bank of England has said borrowing will get tougher this year, especially for those with lower deposits to put down.

The National Association of Estate Agents recently reported that the proportion of sales made to first-time buyers dropped to a seven-month low in May to 17%, well below the "healthy" long-term 40% average.

However, the Council of Mortgage Lenders suggested a more positive forecast going ahead, as it saw a bounce back in first-time buyer activity in May, with a month-on-month increase of 43% in the number of loans advanced.