House prices continue to rise

14-Sep-2006

According to data from the Royal Institution of Chartered Surveyors (Rics), house price growth continued for the fifth consecutive month in August, despite the recent interest rate rise, raising concerns about first time buyers struggling to enter the market.

In August, around 35 per cent of chartered surveyors confirmed an increase in prices.

"Last week's interest rate freeze will mean that the housing market will maintain its current positive momentum," said Ian Perry, a spokesman for Rics.

"Would-be buyers have been encouraged by a strong economic performance, but additional rises in interest rates before the end of the year could deter buyers, as more pressure builds on personal finances."

"Further rises in house prices will prevent entry into the market," he added.

A recent survey from the Council of Mortgage Lenders has found that first time buyers are now committing to new mortgages with income multiples of 3.21 their annual income.

Mortgage interest payments now account for 16.7 per cent of a first time buyer's monthly income.

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