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Property Buying Costs Hit New High

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Nothing you dont already know but.........

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http://news.sky.com/skynews/article/0,,30400-1282793,00.html

Property Buying Costs Hit New High

Updated: 07:51, Wednesday September 05, 2007

Getting onto the housing ladder is the hardest it has been for 17 years.

Prices have surged

Prices have surged

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 said.

The RICS says the continuing strong price growth and five interest rate rises in the past year are to blame.

A first-time buyer couple with total take-home pay of £25,899, would now have to save up the equivalent of 90% of their annual post-tax earnings, or £25,600, for a deposit, the group said.

At the same time, a couple on this income would have to spend 44% of their take home pay on a mortgage, only 4% less than the record of 48% reached in 1990.

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It warned that with some of the recent interest rate rises still to filter through, the number of homes being repossessed is likely to continue increasing.

Unsurprisingly, 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.

First-time buyers are facing an enormous struggle to access the housing market," said the RICS's David Stubbs.

"This may worsen if the turmoil in the US market forces mortgage providers to tighten lending criteria and demand even higher deposits.

"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.

But he added that 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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