The affordability of house prices are expected to correct themselves by 35 per cent, according to an economic expert.
Firstrung have said that inflation on property, “as a phenonmenon”, is over for the present generation of consumers.
However, some first time buyers who might have a good income are going to struggle in the wake of the credit crunch, despite having clean credit histories.
Paul Holmes, chief executive officer of Firstrung, said: “Last year first-time buyers watched prices go up on first-time buyer properties by an average of £19,000.”
“We’re now reverting back to the lending standards that the banks and building societies operated within in the 1980s. It’s become that bad.”
He estimated that prices will fall by 12 per cent over the course of the next year.
Just before Christmas it was announced by the Halifax that the average house in 96 per cent of towns are now not affordable for first time buyers, and that the number of first-time buyers was at the lowest level since 1980.
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