County's property boom to continue
By Katy EdwardsTHE property boom looks set to continue in Suffolk with forecasters predicting a 10% rise in house prices this year.The Royal Institute for Chartered Surveyors' announcement today will come as a big relief to homeowners who feared the slight slowdown in the market following the war in Iraq might signal a more serious slump.
By Katy Edwards
THE property boom looks set to continue in Suffolk with forecasters predicting a 10% rise in house prices this year.
The Royal Institute for Chartered Surveyors' announcement today will come as a big relief to homeowners who feared the slight slowdown in the market following the war in Iraq might signal a more serious slump.
But for first-time buyers, a 10% rise would lift the first rung of the property ladder even further out of reach.
The rising inequality of incomes, low levels of house building and falling interest rates are preventing many people from buying their first home.
David Potter, regional director for the Royal Institute for Chartered Surveyors, said: “Many first-time buyers, particularly public sector workers, are unable to save the substantial deposit required to bridge the ever-widening financial gap.”
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Graham Mitchell, director of the lettings agency Masons Estates in Ipswich, said he had seen a marked upturn in the number of “professional class” people choosing to rent rather than buy.
He added: “Three or four years ago someone moving into the area for work would normally have bought straightaway, whereas now they are more likely to rent.
“We are dealing with more high-ranking workers all the time. In the past year we've dealt with 15 trainee lawyers.
“There doesn't seem to be that stigma attached to renting any more as the house price situation is forcing more and more people into it. It seems renting is now the professional thing to do.”
Mr Mitchell said buy-to-let was a factor in driving up prices in Suffolk, with a lack of confidence in the stock market leading investors to look to property for a good return.
Daniel Wetmore, of Flick & Son in Southwold, said he was seeing a stream of people who could afford to buy opting instead to rent in the hope prices would drop.
He added first-time buyers had not been seen for about 25 years in Southwold, where second-homeowners continued to push up house prices.
Mr Wetmore said the house price rise meant someone would have to earn about £25,000 to £30,000 to be able to afford a modest home in Halesworth. “Very few people in Halesworth earn that kind of money,” he added.
Peter Watson, the Royal Institute for Chartered Surveyors' Suffolk spokesman, said demand for properties along the Suffolk Heritage Coast remained strong.
He added houses in popular locations bought last summer and sold this spring were still showing a “modest profit” for owners, even after expenses and stamp duty had been deducted.
Among the public sector workers unable to buy their own house is Anne Edney, 27, a teacher at Blackbourne Middle School in Stanton.
She is currently paying £300 a month to rent a flat in Claydon and after five years in the teaching profession, she is still unable to buy her own home.
“I've looked into it, but I can't afford to put a deposit down and I wouldn't be able to afford the mortgage repayments,” she said.
“I would have to pay around £450 a month. I've got too much to cope with at the moment paying off my car and other expenses.
“With a lot of other jobs, your salary relates to where you live, but with teaching it's a standard pay scale and doesn't allow for the fact that houses are so expensive in the South East.
“Unless I get a sudden windfall I will carry on renting. For that to change, either the houses will have to go down in price or I will get a huge salary rise. The 10% growth forecast in house prices in Suffolk is definitely not good news for me.”
Paul Woolstenholmes, a Felixstowe firefighter and Suffolk secretary of the Fire Brigades Union, said new recruits could not afford to buy a house in the town.
“When I first came to Suffolk, I had to borrow twice my annual salary to get my first house,” he added.
“As a new recruit today, that would only get me £44,000. That wouldn't buy me anything. Firemen have no choice but to live in the town where they work, so they have to rent. That is one of the reasons why we are asking for a decent pay rise.”