Falling prices 'music to the ears' of first-time buyers

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The Independent Online

House price falls are tempting first-time buyers back to the property market, research indicated today.

Around 26 per cent of people who hope to buy their first property during the coming year are first-time buyers, up from a low of 22 per cent in July, according to property website Rightmove.

The group said the small increase in the number of first-time buyers who thought they would be able to get on to the property ladder coincided with a rise in the number of people who think house prices will fall during the coming year.

A third of first-time buyers now expect the cost of property to be lower in 12 months' time than it is now, up from only a fifth who felt this way during the previous quarter. "Lower property prices might well strike fear into the hearts of property owners, but it will be music to the ears of those eager to take their first step onto the property ladder," said Miles Shipside, director of Rightmove.

He added: "The success of agents in convincing sellers to be more flexible on price lowers one of the key hurdles faced by first-time buyers and sets a precedent for all sellers in a chain to accept their share of the reductions."

The research also showed that only 28 per cent of people are trying to buy their first home on their own, with 69 per cent buying as a couple and 2.5 per cent buying with their parents. Just under 1 per cent of people plan to buy a property with a friend. More than half of first-time buyers are now aged between 25 and 34, with less than a fifth aged under 25.

Meanwhile separate research from the National Housing Federation found that a first-time buyer in London now needs to earn nearly £100,000 in order to buy an average-priced home. Even if people opted for one of the cheapest 25 per cent of properties, they would still need a salary of more than £50,000, nearly double the average income for someone working in the capital.