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First-time buyers 'punished by two-tier property market'
23/11/10
Edited by Andy Jowett.Would-be first-time buyers are being punished by an unfair "two-tier" residential property market, it has been claimed.
A spokesman for PricedOut, a campaign group that lobbies the government for more affordable house prices, said many prospective home owners have been frustrated "for years now".
He added one of the biggest problems facing this group is the high deposits needed to secure a loan from mortgage providers.
The comments come after research from property website Zoopla suggested it is currently more cost-effective to buy rather than rent a home in 80 per cent of towns and cities.
It added that rents are now an average of 9.9 per cent higher than mortgage repayments.
However, the PricedOut representative said the survey fails the "real world test" because it assumes buyers would be on an interest-only loan, which overlooks long-term costs like maintenance and home improvements.
He added the study also shows that while many owner-occupiers are benefiting from record low interest rates, would-be buyers are "stuck renting" with little prospect of getting on the property ladder.
