|
FTBs set to benefit from huge price correction?
4 July 2008 11:30
House prices are set for a spell of substantial decline, one broker has predicted, making property and mortgage repayments more affordable for first-time buyers (FTBs).
Latest Council of Mortgage Lenders' data shows that the average new buyer put down a deposit of 13 per cent in April, the highest level seen in over three years, with this group borrowing the equivalent of 3.3 times their income, down from 3.35 times in March.
According to Firstrung's operations director Paul Holmes, a typical FTB currently pays £15,000 on a deposit, but a 30 per cent fall in house prices would mean that paying this up front would leave them facing monthly repayments little different to rental costs.
He asserted that such a correction is on its way, forecasting that, by the end of 2008, house prices will be 15 per cent lower than in August 2007 and that FTBs, who simply want to own a home and have a manageable mortgage, will be the main beneficiaries.
Mr Holmes therefore advised people looking to get onto the property ladder to save up a deposit for the time being while waiting for prices to fall to affordable levels, adding that they should also profit from the mortgage market eventually returning to normality.
|
