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Halifax state that monthly mortgage payments, as a percentage of income, are well down on 2007

Research from the Halifax suggests that monthly mortgage payments as a percentage of income are now nearly half that of the level of 2007. In contrast, over half of first-time buyers say that affordability is the main reason why they have not stepped on to the property ladder. The numbers of first-time buyers in the first half of 2010, at 94,600, are half that of the same period for 2007, but have increased by 28% against the same period last year.

The combination of lower house prices and interest rate reductions to historically low levels has created a marked improvement in monthly costs for those buyers wanting to take their first steps on to the property ladder. Indeed, the proportion of a typical new homeowner's disposable earnings devoted to mortgage payments has almost halved from a peak of 50% in June 2007 to 28% in June 2010; below the 34% average over the past 25 years. In addition to this, 94% of first-time property purchases are now exempt from stamp duty, with 54% of first-time buyers saying that is has helped them to purchase their home.

Despite the marked improvement in monthly affordability, tightening in lending criteria since the onset of the credit crunch in 2007 may have deterred first-buyers from trying to secure mortgage finance, there are now indications that the environment is improving. Only 3% of first-time buyers say a lack of suitable mortgage products has prevented them buying a home and eight out of ten first-time buyer mortgages are approved. Whilst deposits in loan to value terms increased during 2008, the average deposit put down by a first-time buyer today has been unchanged as a percentage of purchase price since early in 2009.

The key findings suggest that:

- Despite slower growth in house prices and interest rates holding at historically low levels, only 35% of buyers say
that they are taking advantage of the current economic climate.

- Eight out of ten first-time buyer loans are approved.

- 94% of all first-time home purchases are now exempt from stamp duty.

- Only 3% of first-time buyers state that a lack of mortgage products has held them back from purchasing their first

- First-time buyers put down an average deposit of £30,380 in 2010 quarter 2, equivalent to 22% of the property

- The typical buyer takes between three and five years to amount their deposit in the current market.

- A 10% deposit on an average first-time buyer property today is £13,940.

- 64% of buyers purchase a home because they'd rather own than rent.

- Seven in ten are making lifestyle sacrifices in order to save their deposit.

- Nearly a third of first time buyers are stepping onto the property ladder in order to take the next step in life such
as getting married or having children.

- One in ten buyers is putting off getting married or having children in order to buy a home.

- 12% are taking a second job to help their finances.

- Over a quarter of homebuyers have not been on holiday in over a year to save money for a deposit.

- 10% move back in with their parents to help save for their deposit.

- 44% of buyers will compromise on the area they move to in order to get the type of property they want

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