First time buyers 'could gain upper hand'

21-Aug-2007

The latest house price index from Rightmove has shown that prices rose by modest levels for the fourth month in a row in August, raising hopes that affordability concerns could soon ease for first time buyers.

The figures show that prices rose by 0.6 per cent in July, reflecting recent assertions from the likes of Assetz, which last week reported that prices were likely to continue rising for the foreseeable future.

But nonetheless a sustained period of lower growth could prevent prices from rocketing out of reach of some first time buyers as well as lessening the chance of a further interest rate rise from the Bank of England, the firm noted.

"The balance of power has switched from seller to buyer in most parts of the country," commented Miles Shipside, commercial director at Rightmove.

"This could swing even further in buyers’ favour if the current credit tightening reduces lenders’ ability to provide mortgages at the rates achieved in recent months. This may lead to slight increases in mortgage rates even without another rate rise by the Bank of England," Mr Shipside added.

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