First-time buyers in Sussex were dealt another blow this week with reports showing house prices continue to go up ... and up.

One-bedroom flats worth about £130,000 in Brighton and Hove have risen by £200 a week since January, according to property web site Rightmove.

The group said house prices in the South-East had "reignited" after a sluggish end to 2003 and already risen by almost two per cent in the first three months of 2004.

At this rate, house price inflation in the region will hit about eight per cent by the end of the year - double what many market analysts had predicted for the South.

Phil Graves, of the Brighton and Hove Estate Agents Association, urged first-time buyers to be cautious and not be swayed by television programmes.

He said: "Whereas 15 years ago banks were prepared to lend first-time buyers three or four times their salary, they are now lending up to seven times people's income.

"That cannot be allowed to continue.

"While I don't think there will be an Eighties-style crash, there must be a slowdown over the next few years.

"That will mean some people who have borrowed beyond their means will be forced to sell. There will be a steady trickle of repossessions."

He added: "There are so many television programmes telling you all you have to do is buy a property and you have made it. It's not true."

Rightmove said house prices across the UK had risen by eight per cent since the start of the year, compared with a rise of 3.8 per cent in the first part of 2003.

The group reckons house price inflation across the UK as a whole could hit 20 per cent this year as the gap between prices in the North and South narrows.

It said the average home was worth £184,582 in early April, £13,647 more than at the beginning of January and 50 per cent more than at the start of 2002.

The findings are backed by the National Association of Estate Agents' report, which said prices rose two per cent in March for a 12 per cent year-on-year rate.

The two reports are consistent with data from mortgage lender Halifax and building society Nationwide which suggested the market was accelerating again after a brief pause towards the end of 2003.

Wednesday April 21, 2004