House prices are going down, make no mistake. But the reality is that the availability of funds and the restrictive terms placed on mortgages in the current climate make the first step on the property ladder the same elusive dream it was 12 months ago. If we were in any doubt as to the caution surrounding mortgage lending, the staggering 95% drop in lending in August should get any residual optimists off the fence.
So in real terms, should the first time buyer be under starter's orders in his local mortgage brokers? Or is this race more a marathon than a sprint? According to figures released by Hometrack today, house prices have dropped an average of 6.2% in the past year putting the average price of a property at just over £165,000. The slightly more sobering news is that the weekly cost of financing that same property is 12% higher than a year ago before talk of a 10% deposit further spoils the party. What's more, thanks to the new "can't sell-to-let market," renting is a full 30% cheaper than buying.
And what's more worrying is the outlook for graduates. £12 - £16k in debt and looking at an salary in the low £20ks - if they hang on to their jobs and manage to put all of that 30% saving to one side, it will still be 3 years before they've scraped together a halfway respectable deposit.
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