First-time buyers taking riskst

27 January 2007

There’s more evidence that first-time buyers are taking greater financial risks as they struggle to get a foot on the housing ladder. 

Research by Yorkshire Bank found that fewer than 20% of first-time buyers said they would be scared off by the prospect of a mortgage lasting more than 25 years.  Only two in five would rule out a mortgage that was five times their salary. 

The study showed that first-time buyers are also twice as likely to offer more than the asking price to secure their home.  It also found that the majority of young people are now considering mortgages which are more than five times their salary.

Gary Lumby of Yorkshire Bank said: “With the average house price nearing £200,000, this year may feel like the last chance saloon for first-time buyers already finding it hard to buy.”

He added: “Saddling themselves with huge debts isn’t wise, as they could still be paying off their mortgage well into their 60s or even 70s.”

The research also found that parents are so worried that their children will be living with them once they’re grown up, that they are starting saving now – in order to help them buy a home.  15% of parents questioned by Yorkshire Bank have started a “home fund” to try to help their children buy when they are older.