Blog Post

Improvements in affordability

TomS - Head Tom Simper Dec 11, 2023, 11:00 AM

Comparing affordability levels through time helps us understand when a market needs to slow down (affordability is overstretched) or when a recovery can take hold (improved affordability).

A combination of factors (chiefly the expectation of better mortgage rates) will see affordability improve in 2024 and help drive a tentative recovery in buyer confidence.

Lower recent 5-year swap rates (4.4% at the end of November) point to further improvement in mortgage rates.

Affordability, as measured here, represents the proportion of household earnings it takes to meet mortgage payments. Source: #Dataloft, ONS, Bank of England, Nationwide. Affordability is based on FTB prices, assuming 1.5 full time incomes per household; 80% loan to value and average new lending mortgage rate; forecast earnings growth of 3.4% for 2024; average new lending rate to improve to 4.5% by end 2024; FTB price fall of -1% for remaining quarter of 2023 and then stabilised.

Leave a comment
Newest on top Oldest on top
Load more comments
Thank you for the comment! Your comment must be approved first
comment-avatar

"I would highly recommend Gill and the team"

- Isabelle

"I was happy it was clean and painted and well presented, felt very welcoming."

- Sarfraz Ali

"Yaseen was a truly amazing agent."

- Yasuhira Nomura

"The staff at Peter Anthony could not have been more helpful. The team are well led by Gill."

- Steve

"I found Sean to be an understanding and friendly guy"

- Mike

"nothing written"

- Nadeeka Edirisinghalage

"Yaseen has been fantastic very helpful and good communication all the way through"

- Kate Dawson

"Excellent service, quick to find tenants and organising final checks, no complaints so far!"

- Steve