Mortgage payments for new borrowers have reached their most affordable levels for 14 years, with typical payments in some areas of Scotland and northern England taking up less than a fifth of disposable incomes, according to research from Halifax.
Average mortgage payments for new borrowers, including first-time buyers and home movers, were 27 per cent of disposable earnings in the fourth quarter of 2011.
This is the lowest proportion since spring 1997 when payments were 26 per cent of income – well below the 37 per cent average over the past 27 years.
The study also highlighted a “clear North/South divide”, with the least affordable areas located in London and the South East.
Kensington and Chelsea in London was named as the least affordable local authority district, with mortgage payments taking up 78 per cent of disposable local earnings.
The Scottish areas of East Ayrshire, where mortgage payments take up 15.7 per cent of take home pay, and West Dunbartonshire and North Ayrshire, where payments account for 16.2 per cent of disposable earnings, were found to be the top three most affordable local authority districts in the UK.
Across the UK, mortgage payments have nearly halved as a proportion of income from their 2007 peak of 48 per cent, as house prices have dropped along with mortgage rates.
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