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Housing affordability down 350% since 2006

Housing affordability is near to a record low, and has dropped by 350 per cent in the past 11 years, according to new figures from the Royal Institution of Chartered Surveyors' (Rics) accessibility index.Data from Rics shows that homes are now five times more expensive for first-time buyers than they were in 1996, and the average cost of getting on the property ladder has risen by 8.4 per cent in the year leading up to the second quarter of 2007 alone. Buyers in the southeast and southwest of England now need to save more than they earn in a year as a deposit on a house, compared with the 20 per cent of their earnings they needed in 1996. Rics senior economist David Stubbs said the situation could well worsen. "First time buyers are facing an enormous struggle to access the housing market. "This may worsen if the turmoil in the US market forces mortgage providers to tighten lending criteria and demand even higher deposits. "Even if prospective first time buyers make it onto the market, they face mortgage payments which take up a higher percentage of their take-home pay than at any time since 1990," he said.

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