House price drop 'doesn't make buying much easier'

Real estate experts have claimed that despite the recent drop in housing prices in London and elsewhere, home-seekers should not get too excited.

Property specialists Firstrung indicated that rental property could still be the best choice with many, with prices still too high for most first time buyers and a recent complication in mortgage criteria.

The Halifax House Price Index recently revealed that house prices fell by 1.1 per cent in November, with the capital showing particularly sharp decreases, but the index still placed current house prices 6.3 per cent higher than last year.

Paul Holmes, chief executive of Firstrung, said: "For first time buyers it is way too early to celebrate. First time buyers possibly have to be more careful now than at anytime in the past four years."

He underlined the recent narrowing of the mortgage lending, claiming: "Although the house price fall will be good news for first time buyers, their mortgage choice is going to be limited quite severely."

Mr Holmes said that around 40 per cent of mortgage products were now out of the market, with the remaining ones requiring harsh underwriting criteria – making property rental a brighter prospect for many.

Published 6th December, 2007

© 2007 Estates IT Limited