First time buyers 'could see market crash'

18-Sep-2007

The housing market stands a one in ten chance of crashing over the course of the next year, the Royal Institution of Chartered Surveyors (Rics) has said, potentially leading more first time buyers to wait before moving onto the property ladder.

With many potential homeowners already holding back until interest rates show signs of stability, Rics has said that London prices alone stand a one in five chance of falling over the next 12 months.

However, overall the organisation believe that prices will remain constant as the year progresses.

Rics chief economist Simon Rubinsohn told Reuters that talk of a crash was not irresponsible but rather a potential eventuality.

However, earlier this month Haart estate agents advised that first time buyers could return to the market in the autumn as price growth and interest rates stabilised.

Further indications as to the future direction of the base rate will be provided tomorrow when the minutes of this month's Monetary Policy Committee (MPC) will show how many members were opposed to the decision to hold rates at 5.75 per cent.

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