Correction in house prices "best gift" for first-time buyers

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Correction in house prices "best gift" for first-time buyers

Mon 14th Apr 2008

More than anything else, first-time buyers need a correction in house prices, according to the chief executive of Firstrung.

Paul Holmes suggested that rather than government initiatives, "the best gift" anyone could give someone looking to get on the property ladder would be "a moderate or a significant correction in house prices of about 20 per cent".

He remarked that schemes such as Open Market HomeBuy could have more to do with allowing the government to meet its goals than helping first-time buyers.

Referring to the scheme, which offers first-time buyers incentives to purchase affordable new housing, he stated that new homes "are always overpriced".

Mr Holmes also proposed that the government could be targeting first-time buyers because with property prices falling, it is likely to find it difficult to get buyers interested in the 200,000 extra properties it is planning to build over the next five years.

Recently the Royal Institution of Chartered Surveyors warned that shared ownership schemes will not be enough to solve first-time buyers' affordability problems.

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