Page last updated at 12:40 GMT, Thursday, 10 April 2008 13:40 UK

'Bring on the property crash'

By Jon Kelly
BBC News

Izzy Miyagh
Izzy Miyagh has been looking for a home for three years

The drop in house prices might be a disaster for many home-owners, but some first-time buyers see it as a godsend.

Left behind by more than a decade of soaring property values, thousands of young workers look to a slump as their only hope of securing an affordable mortgage.

The Bank of England may have warned that the credit crunch will squeeze the availability of home loans.

But with prices falling by 2.5% in March 2008 - the biggest monthly decline since September 1992 - plenty are optimistic that their time may be about to come.

'Can't wait'

One frustrated young professional is 34-year-old Izzy Miyaghi from Birmingham.

He has been trying to get his feet on the first rung of the property ladder for three years.

But Izzy's masters degree and 28,000-a-year job as a community education outreach officer have not helped him achieve his ambition.

With a typical flat in his area selling for 120,000, he believes only a housing recession will help him.

"I can't wait for the crash," he says. "Bring it on.

"People talk about the crisis in the property market. But the real crisis is that so many people can't afford a home of their own.

"I'm not looking for an investment. I'm looking for somewhere to live. The sooner a correction comes along, the better."

Of course, many first-timers feel guilty about hoping for a slump.

English teacher Heidi McFadden, 29, from Colchester, Essex, is old enough to remember the repossessions and negative equity that followed the crash in the early 1990s.

Sebastian Clarke
It's incredibly difficult to find somewhere
Sebastian Clarke
But unable to find anywhere affordable on her 30,000-a-year wage packet, she admits that doom-and-gloom headlines are giving her hope.

"Morally, I feel bad about wanting it because I know people will end up on the street," she says.

"But an entire generation of young professionals has been unable to get on the housing ladder as a direct result of immoral lending.

"I don't want to pay more than three times my salary, because any more is too risky, but that won't get me anywhere round here."

Nor are these sentiments confined to south-east England and the cities.

Sebastian Clarke, 25, from Aberystwyth, Ceredigion, is an IT worker on about 20,000 a year, who is also finding it tough to buy his own home.

He and his fiancee were offered a mortgage of 96,000 - but most of the two-bedroom houses in the area go for between 160,000 and 170,000.

HAVE YOUR SAY
The only people who lose are very recent first time buyers and investors
Adrian Hatherall, London

And even property which is well above their price bracket would make the keenest DIY enthusiast shudder.

"I went to see a one-bedroom cottage in the country - it had no water, no electricity, no kitchen, no bathroom, no drainage and no sewerage," Sebastian says. "The asking price was 125,000.

"Even for someone like me with a reasonable salary and a secure job, it's incredibly difficult to find somewhere.

"It's the buy-to-let owners I blame - not people who rent out the odd flat, but the handful of portfolios that own most of the properties around here."

Hung on

However, the falling cost of property may not be the immediate salvation many would-be home-owners are banking on.

Jonathan Davis, managing director of chartered financial planners Armstrong Davis Ltd, predicted the credit crunch would eventually be good news for those priced out of the market - but advised first-time buyers to wait.

"Don't touch property with a bargepole for two or three years," he advises.

"Prices are likely to fall by 30-40% over a four-year period nationally."

If this turns out to be accurate, then many young people will feel they have already hung on long enough.




SEE ALSO
House prices in 2008 - up or down?
28 Dec 07 |  Business
Q&A: Mortgage squeeze tightening
03 Mar 08 |  Business
How to get on the housing ladder
12 Jun 07 |  Business

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