More expensive mortgages not putting Brits off

Britons do not think that more expensive mortgages mean buying houses is a bad idea.

That is according to new figures showing while 93 per cent of UK residents believe interest rates - and therefore mortgage costs - are likely to rise, almost three people in four (71 per cent) think investing in property is a good idea and it is still a good time to buy.

And the study, by Property for Life, shows just six per cent of Brits think house prices will fall, with 20 per cent predicting a stable market and 74 per cent seeing room for more growth.

"Interest rates have risen steadily since mid-2005, but despite further predicted rises, the residential housing market shows no sign of contracting," said David Austin, Property for Life managing director.

"The average house price in April 2007 was around £180,300 up from £162,000 a year ago, and this survey shows that the general public still believe that there is room for further growth."

The research also shows 58 per cent of UK residents think interest rates could rise again even if they go up to a five-year high of 5.5 per cent this week.

Some 30 per cent of Britons anticipate rates rising to six per cent or more, however while most people anticipate a rise, few understand why.

"What is interesting is that, although nine out of ten people predict further interest rate rises, only one-third feel that this is actually necessary," Mr Austin said.