Market downturn 'good news' for buyers

Posted: 16 Jan 2008 10:43:02 GMT

People looking to buy a property in the UK could actually benefit from the recent decline in property prices.

People looking to buy a property in the UK could actually benefit from the recent decline in property prices.

That's according to David Kuo, head of personal finance at website Fool, who said that a market downturn is "without question" what buyers have been waiting for.

"I think we are already seeing indications - in December house prices were starting to moderate, and I think that will continue through 2008 itself," he said. "It is good news for buyers and it is exactly what they have been waiting for."

Mr Kuo said that he expected house prices to drop by 20 per cent over the course of 2008. A new report from the Royal Institute of Chartered Surveyors revealed 49.1 per cent of members said prices were dropping, the highest number for 15 years.

Despite this drop in prices, Mr Kuo warned that some first-time buyers should still exercise caution when entering the market.

"In 2008, even though house prices will be down by about 20 per cent, it will still represent about six times the average salary, which is still quite high," he pointed out.

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