According to prime minister Gordon Brown, UK house prices should stabilise as a result of increasing demand by first-time buyers. A Bloomberg BusinessWeek article reported that Mr Brown recently made this statement during an event in Cardiff, Wales.
Mr Brown said that the property market is currently experiencing a demand for housing, which could well drive the speed of economic recovery in the country. However, there are also factors that limit this possibility.
The Prime Minister said: ?Lots of young people want to get their first step on the housing ladder and are being prevented from doing so at the moment.?
One of the problems is the way in which banks used credit to help them recover after the economic downturn. The effect is that there is less credit available for mortgages, which in turn results in fewer mortgages being granted to first-time buyers.
Indeed, according to a report from Financialadvice.co.uk, the number of first-time UK property buyers is at a 20-year low, with only 347,000 new entrants recorded from March 2009 to February 2010. This is less than half of the 700,000 first-time buyers recorded for the year 2004-2005.
Mr Brown, however, maintains that the first-time buyer demand in the country is increasing when considering the availability of homes in the price range required. He is therefore confident that stability is more likely than not in the near future, which will benefit buyers in several ways. Mr Brown for example also said that those entering the property market should get ?relatively low interest rates?.
The British government is currently involved in various schemes to encourage young buyers to enter the property market.
