The recent credit crunch and the recession that followed on from it brought an end to the years of high house price inflation. While the cost of a home increased markedly in 2007, the economic downturn brought about a rapid change, as values plummeted and affordability, in theory, improved.
Of course, for many this was not the case, as the financial crisis saw higher loan-to-value deals all but vanish and meant large numbers of would be first-time buyers were unable to make the most of lower prices due to the size of the deposit they required. Others resorted to the bank of mum and dad to raise the cash needed to meet the upfront costs involved with buying a home.
For those looking for a homeowner loan as the market gradually recovers and Britain crawls out of recession, the situation may not necessarily be much brighter, it has been claimed.
Head of communications at the Home Builders Federation (HBF) Steve Turner warned that there is a danger of a new boom in the years ahead, with first-time buyers suffering from a housing shortage that the HBF currently estimates to stand at one million properties.
He remarked: "What we need to be seeing is government policies geared towards ensuring that we are providing enough homes so that we are not seeing the sort of boom in prices that we have seen in recent years that really don't do anybody any particular favours."
The policies employed by the new government will be "absolutely critical" in preventing a worsening of a situation that is seeing people leaving the family home later, buying their first home at an average age of 37 and having to make compromises on the areas they live in.
The comments come after Smartnewhomes.com revealed that the average newly-built house cost 1.9 per cent more last month than it did in March.
It also noted that while the year-on-year figure was down 0.3 per cent, this was the smallest level of decline recorded in two years.
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