Homes in Britain are currently priced 35 per cent higher than most people can afford, a property expert has said.
Paul Holmes, chief executive of Firstrung, said “market forces have run amok”.
“I think we all have to look at when house prices peaked this time last year and take 35 per cent off that price,” he said.
Mr Holmes added that this correction would take prices back to levels seen in 2003 to 2004, “when first-time buyers were still struggling”.
The difficult housing market may see people building up debt management issues due to arrears from high mortgages. People in this position should consider seeking debt advice.
According to the Royal Institution of Chartered Surveyors, to purchase a typical home, buyers need to find £27,738 for upfront costs. For a first-time buyer couple who earn lower quartile earnings (totalling £27,516 after taxes), this means saving more than 100 per cent of their combined take-home pay.
By Morwenna Kearns