Property prices 'should drop a third' for affordability Published: 22/08/2008

Property prices should drop by at least a third in order to make life easier for first-time buyers, according to an expert.

Paul Holmes, chief executive of Firstrung, said that market forces have made property prices far too high for the average buyer.

He said they must be cut by 35 per cent to compensate for this and enable first-time buyers to have a higher proportion of the market.

The latest research from Nationwide shows that UK property is now facing its fastest decline in value since 1991.

Average property prices now stand at £15,000 lower than in July last year, but according to Mr Holmes they are not low enough yet.

He said: "I have been a doom monger where house prices are concerned for sometime, but my own belief is that market forces have run amok."

He added: "At the moment house prices are 35 per cent above the trend line for affordability. I think we all have to look at when house prices peaked this time last year and take 35 per cent off that price."

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