90% LTV mortgages 'needed for house price growth'

Posted: 15 Jan 2010 11:59:08 GMT

It has been suggested that 90 per cent loan-to-value (LTV) mortgages need to become more readily available to free the home loan market and in turn, ensure sustainable house price growth.

Lucian Cook, director of residential research at Savills, states that in addition to this the UK will need to return to healthy economic growth and fully emerge from the recession before growth in property values can be sustained.

The most recent UK Housing Market survey from the Royal Institution of Chartered Surveyors revealed that house prises rose at a slower rate in December 2009 than in October or November.

Mr Cook says: "This bodes for more volatility in house price rises going forward."

He adds that future prospects for short-term price growth in the housing market will become limited.

A recent statement from the Treasury Select Committee, published January 6th, suggested that while property prices have stabilised in recent months, the price to earnings ratio is historically high.

"We are concerned that such a position is potentially unsustainable, given that monetary policy will eventually tighten," the statement continued.

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