More people rent as getting on the property ladder becomes harder
Published: 05-Sep-2007
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It is becoming harder for people in the UK to become homeowners, suggesting that many will have to rent for longer.
That's the conclusion of a report from Rics, which looked at the affordability of the UK housing market.
The study found that cost of becoming a homeowner in the country rose by 8.4 per cent in the first half of 2007 and it now costs 350 per cent more to get on the property ladder than it did in 1996.
In addition, the cost of servicing a mortgage has also proportionally increased since 1996 - again making renting a more attractive option. Indeed, the data shows that a couple on lower quartile income now have to spend 44 per cent of their combined take-home pay on their mortgage.
"First-time buyers are facing an enormous struggle to access the housing market. This may worsen if the turmoil in the US market forces mortgageproviders to tighten lending criteria and demand even higher deposits," warned Rics senior economist David Stubbs.
"House prices have risen by over 11 per cent a year since 1996 whereas first-time buyer incomes have only risen by 3.5 per cent a year."
Recently, Halifax suggested that there could be a particular demand for rental accommodation in the countryside as housing there is becoming increasingly unaffordable.
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