House price correction 'ideal for first-time buyers'

A spokesperson from housing advisory service Firstrung has said that first-time buyers would benefit more from a correction in house prices than from schemes and initiatives.

Paul Holmes, chief executive of the organisation, made the comments following news that the government has set out a new rent now, buy later scheme which will allow households earning under £60,000 to rent at 80 per cent or less of the going rate for two or three years in order to save up for a deposit.

"First-time buyers need house prices to correct. They don't need more mortgage products quite frankly; they don't need more tinkering of … initiatives or schemes.

"The state the housing market is at now, it is ripe for a considerable correction and that is the best thing that could happen for first-time buyers," Mr Holmes commented.

He added that this would allow people looking to get a foot on the property ladder to save up for a deposit, as well as to get a reasonable mortgage for a good-sized house.

According to the Council of Mortgage Lenders, gross lending for mortgages fell to around £23.8 billion in June, down 32 per cent from the same month last year.