Tighter lending 'will help affordability'

Lenders who act more cautiously following the credit crunch will help the market return to normality, though this process will take a considerable amount of time, Firstrung has said.

The firm has suggested that an absence of free credit in the future will help put an end to a market that has been driven to "insane" levels by an extended period of speculation.

However, it is unclear what kind of situation would enable first-time buyers to regain their traditional hold on the market because of the levels that prices have reached in recent years, Firstrung added.

"The one word that is key here is affordability. Affordability has been detached from the market place for years as people have had access to cheap and easy credit and the market has been pushed to insane heights," said Firstrung CEO Paul Holmes.

"There is a correction on the way but just how long it is going to take to turn around to the point where we reach affordability, nobody can predict.

"Even if we have a one per cent correction every month for the next 24 months, you still wouldn't see a great deal of movement in first time buyers numbers," Mr Holmes added.

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