First-time buyers: Don't panic

First-time buyers should stay out of the property market because house prices are set to tumble, estate agents warned yesterday.

A rise in interest rates, coupled with a drop in property values, could saddle young buyers with unsustainable debts, they said.

With homes increasing in value by an average of £1,000 a month, the National Association of Estate Agents has advised against taking the plunge until 2003, when price rises are expected to have levelled off.

For those paying off a substantial mortgage, a slight interest rate rise coupled with a property devaluation could see a house or flat become a liability, the NAEA said. But a repeat of the property crash of the 1990s, when 1,500 homes a week were repossessed, is thought unlikely.

NAEA chief Hugh Dunsmore-Hardy said: "Properties might be overvalued. Rather than over-borrow and over-commit, don't panic and hang on to your deposit."

The Surrey town of Purley has topped a list of Britain's wealthiest households. Average earnings there are £53,900 a year, more than twice the national average, a survey found.

Purley's golden gates