Global credit squeeze 'could force FTBs out of housing market'"
01 October 2007
As banks and building societies start to impose tighter lending levels following the global credit squeeze, potential first-time buyers (FTBs) may be pushed into renting or shared ownership agreements, Savills has claimed.
The property advisor claimed that despite many people's desires to get a foot on the property ladder, such restrictions in lending may actually turn out to be good news as they could stop people being given mortgages that they cannot actually afford to repay.
The comments comes as latest Nationwide House Price Index found that the average house price has continued to increase, from £183,898 in August to £184,723 in September.
Jim Ward, residential research director at Savills, said: "Is there any harm in making sure that first time buyers can afford the loans they're being given? I think that's a thoroughly good thing.
"It will strengthen rental demand, but that's no bad thing if those people are not taking on mortgages that they could otherwise struggle to pay.
"It also means that products such as shared ownership [mortgages] become more significant when people are looking at getting a step onto the housing ladder. It's a more sensible way of getting in, rather than taking on a mortgage that's too big for you," he added.
