Rising house prices spell more bankruptcies
Rising house prices are likely to cause an increase in personal insolvencies, a leading insolvency practitioner has warned today.
The Department of Trade and Industry today revealed insolvencies were down 5% on last quarter and 7.3% on the same period last year.
But as the Halifax bank announced house prices rose by another 0.7% last month, the high price of housing, particularly in London and the South East led PricewaterhouseCoopers partner Patrick Boyden to warn that bankruptcies will rise again.
He said: ‘Higher house prices require larger deposits which many people struggle to find.
‘First-time buyers are in a particularly awkward spot. They are desperate to move onto the property ladder before prices rise still further and so might buy before they can really afford it.
‘It’s tempting to borrow money for a deposit even if this breaks mortgage conditions, but this could mean problems in the future.’