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House prices 'could fall further'

By Jonathan Dawes, Fri 6 Aug 2010 - Published in Mortgages

First-time buyers could be facing further falls in property prices, an expert has suggested.

Recent figures from Zoopla.co.uk showed that 32 per cent of homes currently on the market have reduced their asking price at least once since being put up for sale, with the average discount standing at 6.1 per cent.

Firstrung chief executive Paul Holmes said that these reductions are just the "start of good news" for first-time buyers, as there is still room for asking and selling prices to move closer together.

"Overall, I'm still very bearish on where I see property values in the next two years and I still think that we have at least another 20 to 25 per cent correction heading our way," he commented.

Mr Holmes also pointed out that public sector spending cuts have the potential to increase the UK's unemployment figures, which could cause a rise in the number looking to sell their home and lead to prices falling further.

According to the Land Registry, the average value of a house in England and Wales currently stands at £166,072.