City homes become more affordable

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More of Britain’s largest cities have become affordable to home buyers and landlords with buy to let insurance.

The general fall in house prices between 2007 and 2010 has improved affordability across Great Britain and increased the choice of property available to prospective home buyers, according to Halifax.

Based on its own data, £150,000 could now purchase a semi-detached property in five out of the ten largest British cities, compared to just one at the end of 2007.

For those further up the property ladder, a budget of £250,000 could now buy all property types in half of the 10 biggest cities in Great Britain, compared to two in 2007.

London is the only major British city where the average price of all property types remains above £250,000.

Other findings from Halifax’s research reveals that over the last three years, property prices in towns located in southern England have generally outperformed the rest of the country.

In contrast, the eight towns that saw the biggest house price falls since 2007 are all in the North.

Martin Ellis, housing economist at Halifax, said: “The higher performance of the housing market in southern England over the last three years reflects the stronger economic performance of this part of the country compared with the rest of the UK.

“Looking forward nationally, we expect limited movement in house prices overall this year but with the risks on the downside.”

While only 6% of the towns surveyed saw a rise in house prices over the past three years, Martin suggests that opportunities remain for both homeowners and prospective buyers.

“It is important to remember that those buyers who bought their home five or more years ago are likely to still have a healthy level of equity in their property,” Ellis said

“On the buyer side, monthly mortgage costs have now nearly halved from their peak in 2007, when 50% of a typical first-time buyer’s income was devoted to paying their mortgage.”

Looking at the figures from a landlord’s perspective, greater affordability in theory should reduce demand for renting – but this is not the case in the current market due to the difficulty many people have in obtaining mortgages.

Thus, with rents still at record highs and property increasingly affordable, it could be a good time for landlords with access to mortgage finance to increase their holdings.

Meanwhile, landlords are reminded to make sure they protect their property as comprehensively as possible by finding a deal on landlord insurance that best suits their requirements.

Discount Landlord Insurance provides a comprehensive range of policies to cover all your needs as a landlord, at the most competitive landlord insurance rates available.

1st March 2011