Rics: First-time buyers face higher risk of repossession

26 January 2007
The Royal Institution of Chartered Surveyors (Rics) is predicting 19,000 home repossessions this year, more than three times the number in 2004, and it believes the burden will fall largely on first-time buyers.

First-time buyers will be more likely than buy-to-let investors to fall behind with mortgage repayments in the coming months as affordability tightens, Rics analysts predict.

"Those buyers who have already taken the housing market plunge could find mortgage companies knocking at their doors in the near future as affordability conditions bite," warned Rics economist David Stubbs.

Buy-to-let investors will be better off, however, since they are older and tend to have larger disposable incomes to direct towards mortgage payments, the statistics suggest.

Only 0.69 per cent of buy-to-let mortgages are in arrears compared to 0.96 per cent of all mortgages in the UK.

"Older, wiser investors are likely to ride out periods of interest rate rises looking to the benefits of long term capital growth rather than short term rental income," Mr Stubbs advised.

Moreover, tenant demand is believed to be likely to stay strong as high house prices push would-be homebuyers towards renting instead.

For more information about first-time buyer mortgages, click here.

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