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Home buyers face worst conditions Home buyers face worst conditions
(about 9 hours later)
First time buyers in Northern Ireland face the worst conditions in 16 years, according to a professional body.First time buyers in Northern Ireland face the worst conditions in 16 years, according to a professional body.
The warning came as the Bank of England raised UK interest rates to 5.25% from 5%.
The Royal Institution of Chartered Surveyors said those seeking to get on the property ladder now had to save an average 81.2% of 'joint take home pay'.The Royal Institution of Chartered Surveyors said those seeking to get on the property ladder now had to save an average 81.2% of 'joint take home pay'.
This was to cover the upfront buying costs of a typical home, including the stamp duty and deposit.This was to cover the upfront buying costs of a typical home, including the stamp duty and deposit.
The average two person household now paid about 22% of take home pay to service their mortgage, said the RICS.The average two person household now paid about 22% of take home pay to service their mortgage, said the RICS.
The RICS Accessibility Index calculates that the cost of becoming a home purchaser in the UK deteriorated by 13.8% in 2006 and has deteriorated by almost 230% since 1996.The RICS Accessibility Index calculates that the cost of becoming a home purchaser in the UK deteriorated by 13.8% in 2006 and has deteriorated by almost 230% since 1996.
'Biggest issue''Biggest issue'
Tom McClelland of the RICS in Northern Ireland said that unless more affordable housing was built and the government raised the stamp duty threshold, more and more households would struggle to access the housing market.Tom McClelland of the RICS in Northern Ireland said that unless more affordable housing was built and the government raised the stamp duty threshold, more and more households would struggle to access the housing market.
"Northern Ireland first time buyers face a tougher challenge than counterparts in the rest of the UK, with lower average salaries here and average house prices now higher than in many other regions; and continuing to rise quickly," he said."Northern Ireland first time buyers face a tougher challenge than counterparts in the rest of the UK, with lower average salaries here and average house prices now higher than in many other regions; and continuing to rise quickly," he said.
"We expect that affordability conditions will worsen in 2007, with RICS predicting house price growth of around 8-10% during the year and the potential for interest rates to rise further next month."We expect that affordability conditions will worsen in 2007, with RICS predicting house price growth of around 8-10% during the year and the potential for interest rates to rise further next month.
"Affordability is without doubt the biggest issue facing the housing market in 2007.""Affordability is without doubt the biggest issue facing the housing market in 2007."
Earlier this month, a survey of regional house prices in the last three months of 2006 showed the fastest growth in Northern Ireland.Earlier this month, a survey of regional house prices in the last three months of 2006 showed the fastest growth in Northern Ireland.
House prices jumped 44.1% in Northern Ireland from the same period a year earlier, three times as fast as in Scotland where prices rose by 16%.House prices jumped 44.1% in Northern Ireland from the same period a year earlier, three times as fast as in Scotland where prices rose by 16%.