A LACK of first time buyers has left the housing market high and dry due to an average price increase of £15,561 for a terraced house in Hyndburn in just one year.
Young couples hoping to take their first step onto the property ladder face disappointment when they realise that their salaries have not increased at the same rate as the accelerating house prices.
And figures recently released by the Land Registry reveal that overall sales of houses in Hyndburn have dropped from 687 in April to June 2004, compared to 485 between the same period this year.
The properties most affected are those which attract first time buyers, such as flats where the average price has increased from £30,626 to £70,590 and terraced houses, which have risen from £50,444 to £66,105.
Mike Ramsbottom, director of Mortimers, estate agents on Blackburn Road, Accrington, said: "At the moment the housing market has slowed down in general, but I hope that new confidence will be restored in people due to the reduction in interest rates announced last week. Hyndburn has held up very well in the struggling market in comparison to areas in the south of England where sales have been very low.
"People are certainly more cautious about buying a house because of the period when interest rates did increase dramatically, which made people stand back and reassess their position. It is harder to sell a house at the moment and takes far more viewings in order to get the sale, but people do still want to move up the market and prove themselves and the town still does have an active market.
"Providing there is no bad employment news, I am hoping that house prices in Hyndburn will level out, especially terraces which have risen sharply and that we will resume and have a normal housing market."
Carol Cowburn, managing director of her own estate agents in Blackburn Road, Accrington, said: "Salaries of first time buyers haven't doubled like the price of a terraced house. Two years ago you could buy a terrace for £35,000 but now you would struggle to get one for less than £70,000.
"It is a lack of this type of buyer that has slowed down the market as they are at the bottom of the chain, but cannot afford to buy a house and so either live at home with their parents for longer or rent a house.
"Due to a quarter of a per cent decrease in interest rates, youngsters are now more likely to come out of rented property and buy a house. People need to be in a position where they can find a property suited to their salary.
"I am hoping for a further decrease in interest rates in the future so that the whole economy can function buoyantly."