Affordability has improved by 21% since reaching a peak of 48% of income in quarter three of 2007 and sits well below the average of 36% recorded over the past 30 years.
Craig McKinlay, mortgage director at Halifax, said: "Substantial mortgage rate reductions and lower house prices have led to a significant improvement in mortgage affordability since the peak of the housing market six years ago.
“The Funding for Lending Scheme has helped lenders to cut mortgage rates causing a further modest improvement in affordability over the past year despite the modest rise in house prices nationally.”
There has been a further modest improvement over the past year with typical mortgage payments for a new borrower, both first-time buyers and homemovers, at the long-term average loan to value ratio falling from 28% of disposable earnings in 2012 quarter two to 27% in quarter two of this year.
And mortgage payments have fallen by at least a half as a proportion of average earnings in 24 local authority areas while more than four in five areas have seen an improvement of at least a quarter.
Despite affordability improving nationwide the findings highlighted a clear north and south divide.
Mortgage payments are at their lowest as a proportion of disposable earnings in Northern Ireland (17%), Scotland (19%), Yorkshire and the Humber (22%) and the North West (23%).
Payments are highest in relation to earnings in Greater London (36%), the South East (34%) and the South West (32%).
McKinlay added: "The favourable mortgage affordability position is a boost for both those who already have a mortgage and those who are able to raise the required deposit to buy a home.
“Improved mortgage affordability has been a key factor supporting housing demand and is helping to stimulate the modest recovery that we are currently seeing.”
