Published on : Sat, 21 May 2005 00:00GMT
by : Sadat Sayeed

Looking at the ordeal first-time property buyers have to face today, one dreadfully realises how difficult it is for young people to secure their first property or their first home.

Figures released by the Royal Institution of Chartered Surveyors (RICS) illustrated that property prices had plummeted from 52% in March to 40% in April. Besides, a 14% increase was noticed in the total available property from last year.

Drastic price falls were seen in houses in cities like Coventry and Warwickshire during April and it is anticipated that these values would slide further.

What is appalling is that these plunging prices have failed to provide first-time buyers any respite. Analysts say that even now, first timers are grappling to climb on to the property ladder to make their first property purchase.

National and regional spokesman at RICS, Harvey Williams felt that young first time buyers could purchase homes via ‘housing association shared ownership schemes’. He added that probably a ‘recession’ would be needed to push first timers into the property league. In his words, “It would take a recession to get properties into the price range that first-time buyers can manage and nobody wants a recession because that isn't good for prosperity.”

Williams notified further that of 100 prospective first-time buyer houses, about 93 properties were being sold to investors, “which is significantly cutting down the options for other purchasers.”

Explaining that the rates of interest were low compared to whopping 10 and 12% back in the 1990s, he said that first-time buyers would have to make extra efforts and try to consider all options, or look "sideways and upside-down" as Williams put it, to attain properties for which shared equity mortgages were available.

However, there was some reason to cheer as well since falling house prices coupled with strong earnings growth recorded this year, implied that houses would become more affordable and come within the reach of a first time buyer soon.