'Affordability improves as house prices fall'

News Category: Marketing

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Housing affordability is improving as the economic downturn continues to affect the UK property market, an expert has said.

Martin Ellis, chief economist at Halifax, suggested that the economy is continuing to provide challenges for property owners and is squeezing the availability of mortgages.

However, in news that may encourage landlords to add to their property portfolios, he added: "The house price to average earnings ratio has fallen below 5.0 for the first time for four and a half years. We expect a further improvement in the ratio over the coming months."

According to Halifax's latest study of the housing market, prices fell by 2.2 per cent in October.

The research also showed that the price of a typical UK home has fallen by 13.7 per cent over the last 12 months and has seen almost £30,000 slashed of its value in less than a year.

Landlords andletting agents might welcome the Bank of England's decision on interest rates at midday today. After cutting rates from five per cent to 4.5 per cent, a further cut in the base rate is expected this month as the Bank seeks to revive the money markets and help pull the UK economy out of recession.

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