House affordability 'to improve for some'

Posted: 27 Oct 2008 14:20:02 GMT

Those people who manage to keep hold of their jobs over the next couple of years could find their affordability improving, an expert has been claimed.

According to Michael Baxter, an economist from Defaqto, costs are likely to begin falling as a result of the recession; good news for people with some capital saved away.

He explained that home buyers could benefit from declining interest rates, which are "likely to be cut and cut again" and could fall to as low as two per cent.

"That is not going to happen over night; that could be two to three years before it starts having a noticeable impact but it will have an impact," Mr Baxter added.

Although house prices have been falling recently, home buyers have had difficulty buying properties because of restrictions in credit and a downturn in the construction industry.

Figures published this month by the Office for National Statistics state that construction output decreased by 0.8 per cent in the third quarter of 2008, a factor that has resulted in less new home builds being completed.

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