U.K. Housing Becomes Most Affordable in Five Years, HBOS Says

U.K. Housing Becomes Most Affordable in Five Years, HBOS Says


Dec. 31 (Bloomberg) -- U.K. houses are now the most affordable in more than five years, helping those looking to buy a home for the first time, HBOS Plc said.

The ratio of house prices to average earnings fell to 4.56 in November, the lowest since July 2003 and down from a peak of 5.84 last year, the country’s biggest mortgage lender said in a statement. The number of regions where housing became more affordable for first-time buyers tripled.

“There has been a marked improvement in housing affordability in many parts of the U.K.,” said Martin Ellis, chief economist at HBOS. “First-time buyers, in particular, are benefiting.”

House prices dropped the most since 1992 in November after tripling in the decade ending last year, according to HBOS. U.K. banks are rationing credit and declining to pass on central bank interest-rate cuts as the economy plunges into a recession.

HBOS said that properties in London, Wales, Northern Ireland and the West Midlands are still unaffordable for those buying their first home.

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