FTBs risk being frozen out, Rics says

14-Jan-2009

The impact of the credit crunch on mortgage lending in the UK poses a "real danger" to potential property buyers, according to the Royal Institution of Chartered Surveyors (Rics).

Ian Perry, spokesperson for the organisation, suggested that some first-time buyers (FTBs) are hoping to purchase homes while prices are low, only to be stifled by difficulties in securing mortgage lending.

He said: "Without mortgage finance the housing market is at a standstill and transaction levels at an all time low. First-time buyers and owner-occupiers are now stuck in a market which does not fulfil their aspirations."

Rics data showed that the number of transactions per estate agency on average, over the last three months, fell from 10.6 in November to a current level of 10.1.

Despite recent interest rate cuts from the Bank of England, Mr Perry's view is that the government needs to take action to improve lending in the mortgage industry, or the property market could face further decline.

FTBs could improve their chances of securing mortgage finance if they can stump up a larger deposit.

Those who can purchase their first property in the near future will benefit from lower prices, as Halifax's latest house price index showed that the value of the average UK home fell by 16.2 per cent in 2008.

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