First-timers are deep in debt even before they buy a home
Saturday 29 April 2006
Nearly half of first-time buyers owe at least £8,000 by the time they start looking for a property, according to a new report from one of the UK's biggest mortgage lenders published today.
The research from Bradford & Bingley reveals that many first-time buyers are already deep in debt by the time they start house-hunting, with 43 per cent admitting they have thought about giving up buying altogether.
Their debts are most likely to be on credit cards and student loans, with one in 10 putting themselves in further debt by furnishing their new homes. According to the report, debt levels are also having an effect on the amount that first-time buyers are willing to borrow. The number asking for five times their income has halved over the past year, as young buyers have been forced to set aside more of their income to cover existing debts.
Duncan Pownall, Bradford & Bingley's mortgage development manager, said: "When it comes to choosing their mortgage, it seems first-time buyers are becoming less inclined to stretch themselves.
"The most popular choice is to borrow the traditional three-and-a-half times their income, but banks and building societies now offer a much wider range of products."
The report also revealed a 10 per cent increase in the number of interest-only mortgages being taken out over the past year.
"Their popularity might be because buyers have existing debts and are attracted by the potentially lower mortgage payments that this style of mortgage can offer," Pownall added.
He warned, however, that buyers should be aware of the risks that are involved with investment-backed and pure interest-only borrowing.
Of those first-time buyers who have successfully managed to buy a property over the past year, 53 per cent have opted for a fixed-rate mortgage in an attempt to control their outgoings. This is up from 34 per cent a year ago.
Around a quarter of first-time buyers did not put down a deposit, up slightly on last year.
Getting a foot on the housing ladder looks likely to get harder still over the coming months, with the latest statistics suggesting house prices are on the rise again.
Figures from the British Bankers' Association last week revealed that net mortgage lending leapt by almost £5.5bn in March - well up on February.
Independent Partners: See how much you could save by switching credit cards. Compare now
Look beyond the usual shows for the best festive telly
elephant appealThe first 23 lots in our charity auction have now gone. But there are 22 more still up for grabs
The battle for control of Stieg Larsson's £30m legacy
Geoffrey Macnab does not like the comedian's big screen debut
Michelle Nijhuis' daughter insists (s)he is, and she learnt a valuable lesson on gender in books
- 1 Sun will 'flip upside down' within weeks, says Nasa
- 2 Christmas comes early: Justin Bieber is 'retiring from music'
- 3 Iain Duncan Smith leaves Commons food banks debate early
- 4 Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
- 5 Burglar steals video tapes of child abuse, hands them into police
Exclusive: Young people ‘want UK to stay in Europe’: Four in 10 adults aged 18 to 24 are ‘firmly in favour’ of membership, poll shows
Tom Daley ‘is gay because his father died’ says UK evangelist
Iain Duncan Smith leaves Commons food banks debate early
Kiss and yell: Italian protester charged with sexual assault after kissing riot police officer
PM denies two child limit for benefits is part of Tory welfare policy
Anachronistic and iniquitous, grammar schools are a blot on the British education system
- < Previous
- Next >
iJobs Money & Business
£Negotiable: Citifocus: High calibre individual with institutional client serv...
£120000 - £150000 per annum: Cornwallis Elt : Programme Manager, Strategy Lead...
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...
Day In a Page
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.