Repossessions to rise, warns Rics

Research suggests that mortgage rates have increased over the past two years, with a two-person household having to spend about 22 per cent of their take home pay on their loans.

This is an almost ten per cent increase from the low of 13.5 per cent witnessed in 1996.

The institution states that further rate rises expected later in the year will affect consumer, accessibility leading to an increase in the number of home repossessions.

David Stubbs, senior economist at Rics, believes that the government needs to do more to make the property market and the cost of living more affordable.

He comments: “Spiralling house prices have created a property glass ceiling for many first time buyers.

“With couples needing nearly 82 percent of joint take home income to fund the upfront buying costs of a typical home, the government’s plans to create an inclusive society seem like a pipe dream.”

The news follows recent data from Halifax suggesting that house prices rose on average by 9.9 per cent across the UK in 2006.