First-time buyers face ‘difficulty’

Consumers are to set to find themselves increasingly priced out of the housing market, an industry expert has suggested.

Chief UK and European economist for Global Insight Howard Archer claimed that as interest rates and property prices continue to rise an increasing number of borrowers will be "squeezed" out of the market as they struggle to make secured and home loan repayments.

He said: "Growing affordability pressures are making it increasingly difficult for first-time buyers to get into the housing market and also harder for existing house owners to trade up."

Mr Archer also pointed out that consumers are yet to feel the full effects of the four base rate rises to have taken place since August 2006.

Meanwhile, a "marked shortage" of housing across the country, particularly in London and the south-east, is reported to be set to drive prices.

Earlier this week, a study by Paragon Mortgages indicated there is "still a healthy appetite for bricks and mortar" among consumers despite the impact base rate rises over the past 12 months have had on the ability to make homeowner loan repayments.

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