Repossessions 'to rise in 2007'
Tuesday, 12 Dec 2006 10:33
House prices are set to continue rising in 2007
Rising numbers of home repossessions can be expected in 2007 because of continually rising house prices, the Royal Institute of Chartered Surveyors (RICS) has said.
The prediction comes as a result of the RICS' forecast of a seven per cent overall price growth within the UK property market next year. This will make conditions much worse for struggling homebuyers, it claims.
Affordability constraints are yet to restrict Britain's housing market in the second half of 2006, as continually unmet demand overrides the Bank of England's two interest rate rises in August and November.
Next year RICS believes that although the market will slow slightly, it will retain "significant momentum" thanks to the booming economy and rising employment levels.
"The bleak outlook for first-time buyers looks set to darken further as house prices rise faster than incomes and the government holds the stamp duty threshold at £125,000," RICS economist David Stubbs said.
"Increasing gloom for those trying to get on the property ladder won't have [a] significant impact on the housing market as demand remains strong, disposable income is growing and buy-to-let investors substitute for first-time buyers at the bottom end of the market."