Although house prices have so far held firm in many areas, affordability for hopeful first-time buyers in 2011 is more favourable than at any time in the past dozen years, says a survey by Britain's largest lender.

According to the latest annual Halifax First-Time Buyer Review, the monthly mortgage costs as a proportion of income have fallen below the long-term average and some 40% of local authorities are now affordable for first-time buyers, a sevenfold increase on 2007.

Around 95% of first-time purchases now escape stamp duty - and the proportion of disposable earnings devoted to mortgage payments by a potential new first-time buyer stood at only 27% in September 2010; the lowest since December 1998 and almost half of the peak level of 50% in September 2007.

This significant improvement in affordability over the past three years has been mainly driven by a combination of lower house prices and declining mortgage rates.

In 2010, 40% of local authority districts across the UK were 'affordable' for the average first-time buyer, way up on 2007, when only 6% of areas were affordable. In 2000, the comparable figure was 82%.

Since the temporary increase in the stamp duty threshold for first-time buyers, from £125,000 to £250,000, announced in March, only 5% of first-time buyers paid stamp duty between April and November 2010. Nationally, 39% of home purchases made by first-time buyers have benefited from the increased allowance.

First-time buyers in the South East have benefited most from the change, with almost three-quarters (73%) of first-time buyers in the region not paying stamp duty due to the increase.