Wed, 05 Sep 07
Getting onto the housing ladder is the hardest it has been in 17 years...
UK property is now 350% less affordable for first-time buyers than it was in 1996, when getting on to the property ladder was at its easiest, the Royal Institution of Chartered Surveyors has revealed.
The RICS says the continuing strong price growth and five interest rate rises in the past year are to blame.
RICS's David Stubbs commented: ‘With some of the recent interest rate rises still to filter through, the number of homes being repossessed is likely to continue increasing.
London is the most difficult place for a lower-earning couple to get on to the property ladder, followed by the South East and the South West.
Mr Stubbs added: First-time buyers are facing an enormous struggle to access the housing market. This may worsen if the turmoil in the US market forces mortgage providers to tighten lending criteria and demand even higher deposits.
Mr Stubbs concluded: "Even if prospective first-time buyers make it onto the market, they face mortgage payments which take up a higher percentage of their take home pay than at any time since 1990.
Affordability pressures may be nearing their peak, with house price growth expected to be below earnings growth in 2008, while interest rates may also start to fall next year.
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