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RICS COMMENTS

Commenting on the Halifax house price data, Matthew McKaig, Director of RICS in the West of England, said:

The sharp fall in the Halifax house price index in March highlights the growing pressure on the residential market as lenders continue to scale back their activity in the market. Loan to value ratios are being lowered at the same point as borrowing rates are being raised putting increasing pressure on first-time buyers who are having to find ever larger deposits. There is moreover a real risk that year-on-year house price inflation will turn negative over the next month or two. This will compound the negative newsflow on the housing market.

The Bank of England could respond to growing fears about the impact of the credit crunch and the worsening state of the property market by cutting interest rates on Thursday. Even so, we suspect that any immediate benefit for new home buyers is likely to be limited.

 

Commenting on the Government’s announcement to encourage first-time buyers to participate in affordable housing schemes, Matthew McKaig, Director of RICS in the West of England, said:

"Shared ownership schemes are not a “silver bullet” for affordability issues and will only ever be a small part of a wider package of measures.  The low numbers involved in shared ownership schemes mean their impact on the housing market will be severely limited.  To increase affordability more widely, the Government must take action to boost house building levels by ensuring more land becomes available for development, empty homes are brought back into use and more family homes are built."

 

ENDS             8th April 2008

 

For further information please contact Violet Ridge, Sturgess Van Damme, on 01275 349011 or email violet@sturgessvandamme.co.uk