House price fall 'only a short-term boost' for first time buyers
News Category: Industry News
Published: 28-Dec-2007
This article was brought to you by Rentman the premium property management system
The demand for rental property from first time buyers (FTBs) unable to purchase their first home looks set to remain strong according to new figures released today (December 28th).
Statistics from Nationwide revealed that the cost of a residential property dropped by 0.5 per cent this month, to £182,080.
However, while the decline may offer short-term assistance for FTBs looking to move from rental property to a purchased home, the lender claimed there was unlikely to be longer-term positive impact.
Fionnuala Earley, Nationwide's chief economist, said: "It is true that lower interest rates will probably help market activity recover somewhat later in 2008, as lower house price growth restores some affordability and allows pent-up demand from first-time buyers to be released.
"However, it seems unlikely that there will be a big recovery in activity and prices mirroring the 2005 experience.
"This is mainly because housing affordability is starting from a much worse position than in 2005, while interest rate cuts have started from a higher and more restrictive level."
Buy letting agency software that works
