Housing Falls Welcomed by Some

The housing market will eventually correct itself, much to the benefit of first time buyers, it has been claimed.

According to Firstrung, which specialises in providing financial solutions for first time buyers (FTBs), house prices are likely to fall by 35 per cent in the next three years, meaning that many more FTBs will be able to afford to take the first step onto the property ladder.

Paul Holmes, operations director of the company, said: "As the market corrects, the future is very bright for first time buyers. I would say we are on target now for a fall in house prices of 15 per cent from August 2007 to perhaps the end of this year."

He explained most FTBs are looking to buy a house they can call a home and are less worried about making profits. "If they are more able to buy a property in an equitable manner with a mortgage equivalent to what they would have to pay for rent, then that can only be good for the market", Mr Holmes added.

Firstrung also warned that 100 per cent and 95 per cent mortgage loans are now virtually non-existent for new homebuyers. According to the Council of Mortgage Lenders, the average first time buyer put down a 13 per cent deposit in April, the highest level for three years.