Any change in house prices is unlikely to improve affordability significantly for first-time buyers, it is claimed.

Paul Holmes, chief executive officer of property services provider Firstrung, notes that a fairly substantial fall in house prices would not return the market to the levels seen in previous years.

As homeowner loans are typically based on the value of a property, they may also be at a historical high, when compared with the average first-time buyer salary of about £25,000.

"The average first-time buyer pays £168,000 but the average salary for a first-time buyer is around £25,000 - that is seven or eight times their salary," observes Mr Holmes.

"Even a mild correction, where the market corrected ten per cent over the next 12 months, it still only takes us back to 2005 levels," he adds.

While the annual rate of house price inflation was 11.4 per cent at the end of October, according to Communities and Local Government, figures from Credit Action show the growth in lending secured against property - such as homeowner loans - stood at 10.9 per cent in the previous month.ADNFCR-1287-ID-18344871-ADNFCR

Request a Callback

Fill in your details and we'll call you back