RICS - 10% Growth Forecast in House Prices
RICS housing forecast, 14 May - house prices are still a safe bet for investors, with the RICS (Royal Institution of Chartered Surveyors) forecasting 10% growth in prices, despite the weakening market, this year. But for those unable to come up with a hefty deposit for their mortgage, the struggle to get on the property ladder is likely to get even worse.
Rising inequality of income, low levels of house building and falling interest rates are all contributing to first homes becoming increasingly out of reach for large sections of the population such as nurses, teachers and firefighters.
RICS chief executive, Louis Armstrong, says:
'While the housing market is providing a healthy investment for some, with house prices expected to continue to rise in 2004, many first time buyers, particularly public sector workers, are unable to save the substantial deposit required to bridge the ever widening financial gap.'
On average first time buyers can take out a mortgage loan which is 2.5 times their income. The average first time buyer purchase price was £102,988 (latest figures for 2002) and the actual average first time buyer paid a deposit of £23,095. This is 23% of the total price, up from a low of just 10% in 1996.
On the basis of this information RICS has calculated the average size of a deposit required by each type of public sector worker and found that a primary school teacher would need to raise a deposit of £25,768, a nurse would require £41,524 and a firefighter would require a deposit of £42,850.