House prices 'need correction'

House prices need to be corrected in order for first-time buyers to get on to the property ladder, according to a mortgage advisor at Firstrung.com.

Paul Holmes, chief executive of the mortgage solution provider, described a considerable correction as "the best thing that could happen for first-time buyers".

This is supported by recent research by the Home Builders Federation which disclosed that current home building levels are nowhere near enough to meet demand - with only 160,000 new homes built last year compared to 223,000 required.

"The best thing that could happen for first-time buyers is that house prices correct to a level of achievable affordability," said Mr Holmes.

"They don't need more mortgage products quite frankly. It's tinkering to protect unsustainable house prices in order for that government to protect their votes," he added.

Earlier this month, the Council of Mortgage Lenders (CML) released figures which revealed that gross lending fell to an estimated £23.8 billion in June, down three per cent from May and 32 per cent the same time last year.

House Prices News posted on 30/07/2008 14:22:42