6 Nov

End of cheap credit 'will boost property'

End of cheap credit 'will boost property'

The tightening of the credit market should result in the property market becoming more affordable for first-time buyers in the future, one industry figure has said.

According to Paul Holmes, chief executive of property company Firstrung, cheap credit is likely to become increasingly difficult to obtain for homebuyers as lenders become more cautious about who they lend money to.

This will result in house prices falling due to a shortage of buyers able to afford homes at their current price levels.

"The one word that is key here is affordability," Mr Holmes said.

"Affordability has been detached from the market place for years as people have had access to cheap and easy credit and the market has been pushed to insane heights."

Mr Holmes added, however, that it was unclear how long the market would take to return to affordable levels.

"There is a correction on the way but just how long it is going to take to turn around to the point where we reach affordability, nobody can predict.

"It is going to be a long turnaround."

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