House accessibility plunges
January 11, 2007 by admin
Filed under News, News-Mortgages
The chance of first time home buyers being able to afford a house has plummeted in the last ten years.
Since 1996, accessibility has dropped by an astonishing 230 per cent, matching the low levels seen during the 1980s, says the Royal Institute of Chartered Surveyors (Rics).
An average couple who are looking to get on the property ladder will have to fork out 81.8 per cent of their joint take-home pay, just to make up the £32,784 of up front costs needed to buy a typical house, including deposit and stamp duty.
In 1996, a couple only needed 25.2 per cent of their joint income to start the process of buying a home and analysts predict that things are set to get worse, with a 12 per cent rise in prices in the next two years.
“Spiralling house prices have created a property glass ceiling for many first time buyers,” said David Stubbs, Rics senior economist.
“With couples needing nearly 82 per cent of joint take-home income to fund the upfront buying costs of a typical home, the government’s plans to create an inclusive society seem like a pipe dream.
“Unless the government builds more affordable housing, and raises the stamp duty threshold, many households will continue to struggle to access the housing market,” he added.
Mr Stubbs went on to say that tomorrow’s (January 12th’s) interest rate decision would be watched closely by many households, although analysts expect that another rise will be announced.
