Jump to content
House Price Crash Forum
Sign in to follow this  
BTLlivingthedream

Bbc: Fresh Warnings On Housing Costs

Recommended Posts

--------------

http://news.bbc.co.uk/1/hi/business/6978016.stm

Last Updated: Tuesday, 4 September 2007, 23:00 GMT 00:00 UK

E-mail this to a friend Printable version

Fresh warnings on housing costs

For Sale signs

The gap between incomes and house prices has grown rapidly

The squeeze on home buyers' finances has been highlighted by reports from the TUC and the Royal Institution of Chartered Surveyors (Rics).

The TUC says average English house prices have risen four times as fast as average earnings in the past ten years.

And Rics says first-time buyer couples now need to save almost all their take-home income for a year, to afford a deposit and other up-front costs.

The government said it planned to see two million more homes built by 2016.

Repossessions

According to Rics, a first-time buyer couple would need to save £25,600 to afford an average deposit and stamp duty.

The average joint earnings of a couple in the lowest-paid 25% of the population, in comparison, is £25,899 - just £299 more.

With interest rates rising five times since the summer of 2006, there has been a rise in the number of homes being repossessed from mortgage holders unable to keep up with their financial commitments.

Rics warned that this trend would continue.

"House prices have risen by over 11% a year since 1996, whereas first-time buyer incomes have only risen by 3.5% a year," said Rics' senior economist, David Stubbs.

"This has forced buyers to borrow ever greater amounts, and now higher interest rates are applying pressure to the household finances of recent buyers."

City earnings

The Rics analysis was echoed by that of the TUC.

It is striking that house prices seem to have gone up in line with the pay of top directors and the super-rich

Brendan Barber, TUC

The trade union organisation said that while house prices has gone up by 180% since 1997, average earnings had risen by just 43%.

The TUC's general secretary, Brendan Barber, pointed to the boom in City earnings and huge bonuses as one factor behind this widening gap.

"It is striking that house prices seem to have gone up in line with the pay of top directors and the super-rich, rather than middle and low earners," he said.

"Of course sustained low interest rates and an excess of demand over supply have also helped fuel higher prices, but it is clear that demand at the top of the market from those with city bonuses and inflated boardroom pay has fed down to the rest of the market," he added.

More homes

According to Government figures, house building is currently at its highest since 1990.

Housing Minister Yvette Cooper pointed out that it had plans to encourage the building of two million more homes in the next decade.

"The long-term rate of house building hasn't kept up with rising demand, causing long-term house prices to increase," she said.

"Those who are still opposing new homes need to face up to the unfair consequences for first-time buyers and young families who badly need new affordable homes."

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 356 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.