Mortgage affordability improves - EBS

Mortgage affordability for first time buyers has showed further improvement in the past three months, a new survey found today.

The average first time buyer working couple now pays out only 12.6 per cent of their joint income ito cover mortgage payments, according to the ESB/DKM quarterly affordability index.

This compares to 26 per cent three years ago, and means the average mortgage repayment for a couple was €644 in April 2010, compared to €1,323 in December 2006.

The survey found affordability has continued to improve since 2007.

With predictions for further house price falls in some regions and interest rates exp[ected to stay realtively low, that affordability is expected to continue to improve, with net repayments to fall to 12.4 per cent of net income.

In Dublin, net repayments are expected to account for 14.4 per cent of net income in June 2010 from 32.5 per cent in December 2006.

EBS's Dara Deering said the improvement was positive for first time buyers and appeared to be encouraging activity from this segment.

However, chief executive of the Irish Brokers Association Ciaran Phelan said it remained diffiocult to get a mortgage.

"Affordability has certainly increased in relation to mortgage repayments, but first time buyers invariably need substantial savings to qualify for the mortgage. Demand is down because FTBs don't have the substantial deposit required to apply for a mortgage, not because people don't want to own their own home," he said.