Home repossessions may rise in 2007
Published On 11 January 2007
Home repossessions may increase in 2007 should interest rates continue to rise, one industry body has warned.The Royal Institution of Chartered Surveyors (Rics) has said mortgage repayments are a bigger burden to homeowners than they have been at any time since 1991.
David Stubbs, Rics senior economist, said: "Affordability conditions will also continue to worsen with the monetary policy committee expected to raise interest rates in February.
"However, many households will still be watching today's interest rate decision with keen interest."
Two people living in a household on average incomes can now expect 22 per cent of their salary to be spent on home loan repayments. The last decade has seen massive property price increases with the cost of purchasing a house jumping by 278 per cent.
The first half of 2006 saw around 8,000 properties seized by lenders, which is the highest figure for five years and may be symptomatic of an emerging trend.
Mr Stubbs 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."
