The average house price paid by a first-time buyer in November 2011 was affordable for someone on average earnings - based on the ratio of the average house price to earnings being below the long-term average of 4.0 - in 44% of all local authority districts in the UK.
This is the highest proportion for eight years and compares with 42% in 2010 and just 5% at the peak of the housing market in 2007.
But despite the overall improvement in affordability, there remained a strong north - south split. Around 95% of all the UK LADs that were affordable for first-time buyers were in the North compared with just 5% in the South.
All LADs in the North East were affordable for first-time buyers whereas in London there were no affordable areas for first-time buyers.
Notwithstanding better affordability, Halifax estimates that there were around 187,000 first-time buyers in 2011 - the lowest annual total since records began in 1974, 7% lower than in 2010 and less than half the recent peak of 402,800 in 2006.
Much of the fall in the number of first-time buyers in recent years can be explained by the need to put down a bigger deposit. The average first-time buyer deposit in the first eleven months of 2011 was £27,032. Whilst this was 15% (£4,873) lower than in 2010 (£31,905), it compares with £17,482 in 2007.
As a proportion of the purchase price, the average deposit increased from 10% in 2007 to 20% in 2011.
Seven of the ten most affordable LADs for first-time buyers were in Scotland. South Ayrshire was the most affordable LAD in the UK with an average property price that was just over two and a half times (2.65) gross average annual earnings. The next most affordable areas were Northumberland (2.86) and Renfrewshire (2.88). Peterborough in the East of England was the most affordable LAD in southern England (3.98).
Nine of the 10 least affordable LADs were in the capital. The least affordable LAD surveyed for a first-time buyer in the UK was Brent in London where the average first-time buyer property price was over nine times (9.11) gross average earnings in the area. Oxford (7.75) was the second least affordable LAD. Herefordshire (5.03) was the least affordable LAD outside the south of England.
Martin Ellis, housing economist at Halifax, commented: "Housing affordability for those looking to get onto the property ladder for the first time has improved significantly over recent years, largely as a consequence of the decline in house prices since 2007.
“Nevertheless, conditions for potential first-time buyers remain tough. Difficulties raising the necessary deposit and concerns over the economic climate are preventing many from entering the market."
