Repossession may be a threat to housing optimism

Those looking to move house would still be better off in most cases if they rented rather than bought, a property expert has said.

Earlier this week, a Halifax report said it is 14 per cent cheaper to have a mortgage on a three-bedroom home than rent, but head of consulting at property investment consultancy Ducalian Tim Lambert suggested things are not that simple.

Noting the possibility of changes in the Bank of England base rate over time, he stated: "Mortgages may rise considerably in the next few years as interest rates rise and lenders pass these rises onto consumers."

By contrast, Mr Lambert suggested, rents are more likely to remain stable over an extended period of time.

And he noted that fixed-rate mortgages are becoming more expensive as expectations of a tighter monetary policy grow.

He stated: "Buying may look attractive now, but it may not be the case in three or four years and buyers need to be aware of what they may be paying then, not just what they are paying now."

Mr Lambert suggested Halifax is motivated to push the case for buying homes due to it being one of the biggest mortgage lenders in the country.

Those who do get a mortgage now could potentially leave themselves at risk of repossession in the future if they commit themselves to monthly payments that rise sharply in the years ahead.

According to the Halifax report, it is cheaper to buy than rent in all but two UK regions – Wales and Northern Ireland.

By James Francis