First-time buyers may benefit from house price falls but should still be cautious when purchasing their first home, an expert has warned.

Predictions of a slowing market and price drops were confirmed this week when Halifax revealed that that the average cost of a home had fallen by 1.1 per cent in November.

Paul Holmes, the chief executive officer of advice firm Firstrung, said that while this drop may give a boost to those trying to get onto the property ladder, the market will still be tight.

"Although the house price fall will be good news for first-time buyers, their mortgage choice is going to be limited quite severely," he commented, adding that people are "going to have to get used to there being less available products out there".

While Mr Homes cautioned that first-time buyers might have to be "more careful now than at anytime in the past four years" he predicted that house prices would continue to fall throughout 2008.

"I would say house prices [will be] falling at around 12 per cent during 2008," he said.