'Homebuyers need price correction'

First-time buyers need a house price correction to help them gain a foot on the property ladder, rather than government initiatives, one expert has claimed.

According to Paul Holmes, chief executive of Firstrung, the housing market "is ripe for a considerable correction", which is "the best thing that could happen for first-time buyers" as they will then be better placed to afford a mortgage.

His comments followed news of the government''s ''rent now, buy later scheme'' which will enable households earning under £60, 000 to rent a property at 80 per cent or less of the going rate for two or three years in order to save up for a deposit.

However, Mr Holmes believes: "First-time buyers need house prices to correct. They don''t need more mortgage products quite frankly; they don''t need more tinkering of … initiatives or schemes."

According to the Council of Mortgage Lenders, gross mortgage lending declined to an estimated £23.8 billion in June, down three per cent from May and 32 per cent from June 2007.

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