Wednesday, June 07, 2006

1-in-7 are planning to buy a house by end of year

"The number of people planning to move home has doubled since the beginning of the year as confidence in the property market remains strong, research shows.

Around 15% of people now claim they plan to buy a new house before next winter, compared with just 7% at the beginning of the year, according to Alliance & Leicester. The group said that while not everybody would act on these plans, the increase in intentions showed people felt confident about both house prices and borrowing.

The number of people looking to buy their first home has also increased by nearly a third since January, with 16% of under 30's, the key first-time buyer age group, now planning to move, up from 12% at the beginning of the year. Alliance & Leicester said despite high house prices affordability still remained good and was far better than during 1990 when many people defaulted on their mortgages.

It said people taking out a mortgage during the first three months of the year spent an average of 14% of their household income on interest payments, the lowest level since the second quarter of 2004, and well down on 1990's level of 27% debt. Among all mortgage holders, people had an average outstanding mortgage debt of £85,992 at the end of April, nearly 10% more than last year.

But despite this, affordability remained unchanged with interest accounting for 10% of their income due to lower interest rates and rising pay, increasing to 21% if capital repayments were taken into account.

• YouGov questioned 2,000 people during May. Data from the Bank of England, Council of Mortgage Lenders and the Department for Communities and Local Government was also used.
06 June 2006"

Seems like the 'house price crash' people are going to have to wait a bit longer!

Chris Bell

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