FTBs more likely to take financial risks

Posted: 29 Jan 2007 15:18:11 GMT

First-time buyers are more likely to take financial risks, according to findings from Yorkshire Bank.

First-time buyers are more likely to take financial risks, according to findings from Yorkshire Bank.

Increases in house prices, as well as the recent interest rate hikes, are scaring first-time buyers into a 'now or never' mentality, the bank said.

Consequently first-time buyers are more likely to take financial risks such as taking out mortgages with repayment plans that last over 25 years, or mortgages that are worth more than five times their salary.

Yorkshire bank said that just 20 per cent of first-time buyers found 25-year mortgages too large to contemplate, while only two out of five would shun a mortgage package worth more than five times their income.

Gary Lumby, Yorkshire Bank's head of retail, 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: "To try get onto the property ladder now before prices are totally out of reach, first-timers are taking greater financial risks with the majority now considering mortgages which are more than five times their income or taking longer than 25 years to pay off."

House price inflation is still running at eight per cent, despite three interest rate hikes since August.


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