Price falls 'would be good'

Falling house prices may not be such a bad thing, it has been suggested.

In a Daily Telegraph article, Capital Economics managing director Roger Bootle said house prices have been too high and an adjustment is necessary.

Such a trend will help improve affordability, he stated.

Noting that the government has been seeking to bring such a situation about through various schemes, he stated: "In fact, the best way to make houses more affordable is for prices to carry on falling."

A rise in affordability could mean that more people are able to become first-time buyers.

However, others have said that prices could soon start rising again, which could make self build a more cost-effective proposition.

One such prediction has come from chief executive of estate agent Winkworth Simon Agace, who told Citywire values have already fallen by 15 to 20 per cent due to lower asking prices and buyers being able to negotiate greater reductions.

He suggested: "The transactional level may have just about reached the bottom", meaning there could soon be a reversal in the trend.