"Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many."
However, banks continue to tighten their lending criteria and demand significant deposits amid fears that home owners will default on their loans due to higher unemployment.
Earlier this month, Halifax announced the end of interest-only mortgages for borrowers who do not provide documentary evidence of how their loan will be repaid. Previously, borrowers only had to explain verbally what repayment vehicle they had in place before receiving a mortgage offer.
Other lenders have also tightened their policies on interest-only mortgages this year, with RBS and Coventry Building Society no longer offering this type of deal to first-time buyers.
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