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Buyers climb faster up housing ladder

Vivien Goldsmith,Personal Finance Editor
Wednesday 18 August 1993 18:02 EDT
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THE FALL in house prices has allowed purchasers to buy homes far beyond their expectations, the Royal Institution of Chartered Surveyors said yesterday.

Most estate agents report that house prices have stabilised, with 6.6 per cent registering prices lower than three months ago and 7 per cent recording that they have risen by more than 2 per cent, the RICS said.

Its survey adds to the weight of opinion that buyers are moving faster up the housing ladder. 'Leap- frogging is taking place in all areas,' Tony Copping Joyce, an estate agent in north London, said.

'Some people who set out to look for a one-bedroomed flat have found that their own situation has improved while prices and mortgage costs have fallen. There is a shortage of property with the expectation that house prices will rise.'

The leap-frogging phenomenon has left a vacuum at the bottom of the market, with buyers shying away from standard first-time properties.

In Crawley, West Sussex, according to the RICS, first-time buyers are managing to buy two and three- bedroomed flats, leaving no takers for studios and one-bedroomed flats.

Harvey Williams of the Royal Life estate agency said the worst-hit areas were East Anglia, West Sussex and the West Midlands, including Birmingham and Coventry.

'Better homes will not have a long- term problem, but poorer property may be more difficult as people have a wider choice and can perhaps stretch themselves to better accommodation and locations,' Mr Williams said.

Tony Snarey, the new chairman of Cornerstone Estate Agents, sold this week by Abbey National, said: 'There is a shortage of property. A lot of people are holding off putting their houses on the market.'

New figures from the Council of Mortgage Lenders showed that banks won market share from the building societies last year.

The banks took 34 per cent of new mortgage lending in 1992, almost double their share in 1991. The building societies' share slipped slightly as their new lending fell by 34 per cent to pounds 13.7bn.

Other lenders, such as local authorities and insurance companies, also saw their market share reduce.

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