29th January 2009
Property values need to decline by a further 17 per cent in order to return to levels of affordability within reach of the average property buyer, a property insider has stated.

According to Paul Holmes, the chief executive officer of Firstrung, at the peak of the property boom properties were "35 per cent overvalued" and this needs to continue being corrected by the decline in values.

"We need this to be wiped off the average price of a property to bring it within reaching distance of your average property buyer," he stated, adding that we are halfway through that.

"We have lost about 18 per cent and we need property to fall about another 17 per cent, so from an average priced property being £200,000, it will fall to roughly £125,000 and that will take possibly another 12 months."

At the beginning of the year Nationwide reported that UK house prices had fallen by 15.9 per cent last year to their lowest level since the spring of 2005.



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