A leading financial group has warned that repossession rates may grow this year as more first-time buyers are hit with higher prices and stamp duty fees.
The Royal Institute of Chartered Surveyors (Rics) has responded to lending figures for 2006, released by the Council of Mortgage Lenders (CML) yesterday.
According to the CML report house prices continued to grow in 2006, meaning just 41 per cent of first-time buyers took out mortgages on homes below the £125,000 threshold for paying stamp duty – a drop of almost ten per cent since the level was set in the last budget.
"With affordability and accessibility continuing to deteriorate, first-time buyers are increasingly stretching themselves," commented Rics economist Oliver Gilmartin.
"As prices continue to rise, first-time buyers are being hit by the extra burden of stamp duty with around 60 per cent now paying the tax compared to 50 per cent at the last budget. This added burden makes it imperative that the government looks at raising the lower stamp duty threshold to at least £150,000 in the forthcoming budget."
Repossessions grew by 65 per cent last year to around 17,000 – accounting for around one in every 690 homes.
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