House price boom 'not likely to be repeated'

The house price rises seen throughout the last decade are unsustainable, it has been claimed.

According to a new report from Halifax, the average property increased in value by 105 per cent in the 2000s, despite falling by 21 per cent between the end of 2007 and the middle of last year.

Commenting on this revelation, Jon Brown, partner relationship manager at iammoving.com, said the last decade represented an "economical merry-go-round" which continues to make the majority of people "dizzy".

He added: "If we look back at the lessons we have all learnt from the credit crunch and resulting recession, we must see that an increase in property value of this magnitude - especially when compared to the increase in average income over the same period - is simply not a sustainable prospect and we should not attempt to repeat it."

Mr Brown noted that demand for property will "grow again" as confidence is restored, but dramatic increases in property value are unlikely to be repeated in the immediate future.

The comments may encourage first-time buyers seeking cheap mortgage rates, especially with many lenders still requiring large deposits.

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2010-01-29 12:43:24 © Moneyextra.com