House prices to rise 7% in 2007
First time buyers face an even harder task trying to get on to the housing ladder over the next few years, according to a new housing market indicator, with prices set to continue rising.
A Housing Market Forecast from the Royal Institute of Chartered Surveyors has forecast prices to rise by 7% in 2007, making it even more difficult for first time buyers to get on the property ladder.
The worst affected will be those living in London, the South East, Scotland and Northern Ireland, which are all set to outperform the rest of the UK both next year and for the next five years.
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RICS said activity will remain strong as demand continues to outstrip supply, adding that while repossessions will rise the overall strength of the housing market will limit any negative effect on prices.
Worryingly RICS added that a slowdown in the housing market will not help to ease affordability for first-time buyers as prices continue to outstrip incomes.
"Increasing gloom for those trying to get on the property ladder won't have significant impact on the housing market as demand remains strong, disposable income is growing and buy-to-let investors substitute for first time buyers," said RICS economist David Stubbs.
