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Is housing becoming more affordable to first-time buyers?

A number of major players in the UK mortgage market have come forward to suggest that housing is becoming more affordable to first-time buyers across the country. A number of figures have been quoted showing a reduction in the house price to earnings ratio which peaked at 5.84 last July but has fallen to 4.56 in November. As the pull towards the historic long-term average of around 4.00 continues this should bring a number of potential first-time buyers back into the market. But will this happen in the short term?

Unfortunately while the affordability factor may be moving back towards first-time buyers there is serious concern in the UK employment market with new forecasts suggesting 3.1 million people could be unemployed by the end of 2009. This will place a massive pressure on the first-time buyers' market and with mortgage finance still very thin on the ground it would appear a short-term bounce is unlikely. However, once the employment market in UK settles down we should see a clearer picture and hopefully first-time homebuyers will return to the market in significant numbers.

First-time buyers are the lifeblood of the UK property market and until we see a significant improvement in this area the outlook for the overall UK property market will remain difficult.

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