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Warning over home repossessions | Warning over home repossessions |
(about 6 hours later) | |
Home repossessions could become more common if UK interest rates keep rising, the Royal Institution of Chartered Surveyors (RICS) has warned. | |
Mortgage repayments are now a bigger burden than at any time since 1991, RICS said. | Mortgage repayments are now a bigger burden than at any time since 1991, RICS said. |
For a two-person household on average incomes, home loan repayments now take up 22% of take-home pay. | For a two-person household on average incomes, home loan repayments now take up 22% of take-home pay. |
UK rates rose to 5.25% on Thursday, adding £16 to the monthly payments of a £100,000 repayment mortgage. | |
Rising prices | Rising prices |
House prices have far outstripped incomes in the past decade, with the cost of buying a home rising by 278%. | House prices have far outstripped incomes in the past decade, with the cost of buying a home rising by 278%. |
The price rises were partly driven by low interest rates which have made bigger loans easy to afford. | The price rises were partly driven by low interest rates which have made bigger loans easy to afford. |
Many households will continue to struggle to access the housing market David Stubbs, RICS Why is it so expensive to buy a house? | Many households will continue to struggle to access the housing market David Stubbs, RICS Why is it so expensive to buy a house? |
So far, property repossessions by mortgage lenders have been running at very low levels. | So far, property repossessions by mortgage lenders have been running at very low levels. |
Just over 8,000 properties were seized by lenders in the first half of last year. | Just over 8,000 properties were seized by lenders in the first half of last year. |
That was a far cry from the hundreds of thousands repossessed in the property crash of the early 1990s. | That was a far cry from the hundreds of thousands repossessed in the property crash of the early 1990s. |
But it was still the highest figure for five years, and RICS believes things may get worse if rates rise. | |
Accessibility | Accessibility |
The cost of getting together all the upfront costs of buying a property for the first time have also shot up, according to calculations by RICS. | The cost of getting together all the upfront costs of buying a property for the first time have also shot up, according to calculations by RICS. |
It says a first-time buyer couple now needs to muster £32,784 to pay for items such as a deposit, stamp duty, legal and estate agents fees and other costs. | It says a first-time buyer couple now needs to muster £32,784 to pay for items such as a deposit, stamp duty, legal and estate agents fees and other costs. |
RICS senior economist David Stubbs said that these now amounted to 82% of first-timers' take home pay, up from just 25% in 1996. | |
"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 said. | "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 said. |
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