Next year will be a double-edged sword, says CML

For first-time buyers, 2008 will be something of a "double-edged sword", according to the Council of Mortgage Lenders (CML).

Head of external affairs at the council Sue Anderson explains that if property values stabilise or drop, this will have a positive impact because income growth has been a lot slower than house price inflation in recent years.

Conversely, first-time buyers are possibly the consumers who will be most vulnerable to confidence issues following recent market activity, she adds.

Ms Anderson notes: "Whether that means they will take a wait and see approach, or whether they decide that is it the right moment to enter the market is more difficult for us to gauge right now."

She concludes that the picture is likely to be clearer following the festive period.

The CML is the trade association for the mortgage lending industry, with its membership providing approximately 98 per cent of residential mortgage lending in the UK.