House price drop 'good for some people'

A spokesperson for the property advisory service Firstrung has said that while the fall in house prices may not be ideal for those who already own a home, it could be a welcome prospect for some groups.

Paul Holmes, operations director for the company, said that the main demographic that will benefit is first-time buyers, who may be in a better position to save for a deposit and get a more affordable mortgage.

"One of the issues that I would argue vehemently against is the fact that there has been a feel good factor about property going up in value.

"For [people] who want to live in a house or hopefully buy a bigger house or step onto the fabled first rung, high houses prices are a nightmare. Prices correcting is healthy," he commented.

According to the latest house price survey from Nationwide, house prices fell by 0.9 per cent in June, less than half the rate of the previous month.

Meanwhile, new research from the National Housing and Planning Advice Unit shows that even if house prices fell by five per cent this year and ten per cent in 2009 affordability prospects would not improve.

The organisation blames this on a lack of affordable new housing.