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First-time buyers 'set to benefit most from changes in housing market'

Fri 4 Jul 2008 - Published in Mortgages

First-time buyers unable to afford houses because they do not have large enough deposits and cannot secure 100 per cent loans should not worry, according to Firstrung.

It claims the property market will correct itself over the coming years opening the door to first-time buyers.

Paul Holmes from the organisation said prices could drop by 35 per cent over the next three years allowing new buyers to get onto the first rung of the housing ladder.

He said: "The future is very bright for first time buyers."

However, research from the National Housing and Planning Advice Unit (NHPAU) suggests, even if house prices fell by five per cent this year and ten per cent in 2009, affordability prospects would not improve.

It blames this on a lack of housing and is calling on the government to build new houses.

According to a survey by Nationwide, house prices fell by 0.9 per cent in June, less than half the rate witnessed in May.