Banks hold key to homes

Maxwell Kusi Obodum • Published 4 Sep 2011 12:00 2 Comments

A GENERATION of first time buyers will be locked out of the housing market unless bankers relax stringent lending rules preventing many from securing a foot on the property ladder.

That was the warning from estate agents on Tuesday in the wake of a damning report commissioned by the Housing Federation that property ownership in Reading and the South East could fall under 70% by 2021 - its lowest since the early 1980s.

The bleak forecast, based on a report by independent researchers Oxford Economics, predicts the number of owner occupiers will fall from 72% in 2010 to 69.7% by 2021 - with expensive house prices, lack of new homes and strict lending criteria forcing

people into the private rented sector or onto social housing waiting lists.

It also predicts a 21.9% rise in house prices across the region in the next five years - bringing the average cost of a house in Reading from £193,339 (based on the July 2011 Land Registry House Price) to £235,680.

James Hathaway, director of Atlantis Property Services based in Market Place, Reading, said the number of first time buyers had halved since 2007, and added: "There's a big problem with lending - even if they build new houses, people can't afford them because they can't get the mortgages to purchase them.

"It is locking people out because the criteria they have to meet is a lot higher. They need to offer decent rates."

Craig Pearson from Parkers, also with offices in Market Place, said: "We are seeing first time buyers coming out of the woodwork but many people are relying on their parents for deposits because it is so expensive. The Government needs to look at realistic 10% deposits and good rates for first and second time buyers."

David Tate, managing director of Davis Tate, based in King's Road, said: "The lenders have got to relax their lending criteria. Banks and building societies need to be easier on the money supply - they are continuing a knee jerk reaction from the economic crisis in 2008."

But Mr Tate denied there would be a long term decline in home ownership predicted by the forecast saying: "Yes it's tough on first time buyers but I talk to people in their 60s and 70s and they had to put down 25% mortgages and it was just as hard for them."

Tweet

This article appeared in Reading Chronicle 01 Sep 11

Have your say. Post a comment on this article.

• 

  NotJohn
  Unregistered User
  Sep 5, 09:52
  Report comment

  What's wrong with a decline in home ownership anyway.
  
  Funny how people want the govt to do something about this then complain about too much govt interference.
  
  Recommend?   Yes 0     No 2

• 

  Mooosy
  Unregistered User
  Sep 5, 12:50
  Report comment

  Just done a little calculation. I'm 25 now. If I put away all I have available to save for the next 7.5 years, I will be able to afford a 10% deposit on a £180,000 1 bedroom flat. I have a well paid job, well above minimum wage. If it's going to take me that long to save up, then what hope do we have?
  
  Recommend?   Yes 1     No 0

Post a comment

Your Comment:

Registered users log in here

Username or email

Password

If you are registered with us, you can login here. If you are not registered, do so now.
Once logged in you wont have to complete word verification each time you post.

Prefer not to register?

Screen Name *required

Email (not displayed) *required

Usernames must be 4 - 20 characters. Registration only takes a few minutes. Registered users can also take part in competitions and other features of the site.

Word Verification:
Enter the text as shown.

Return to the main index, get more from this section or browse our News archives.

Follow @rdgchronicle