FTBs have 'little incentive' to get on property ladder

Posted: 26 Feb 2009 13:24:38 GMT

High rates are discouraging first-time buyers (FTBs) from getting their first property, it has been claimed.

Statistics released by Moneyfacts show that FTBs generally have rates that are approximately three per cent higher than the base rate.

Moneyfacts analyst Michelle Slade stated: "First-time buyers are meant to be the life blood of the property market, but with the average rate as high as 7.02 per cent, there is little incentive for them to step on to the first rung of the ladder."

She added that, before the recession, competition was healthy and the best rates were for people with deposits of five per cent.

Recently, the Council of Mortgage Lenders (CML) warned of potential pitfalls to 100 per cent mortgages.

While acknowledging the "inherent appeal" of mortgages worth 100 per cent or more, the CML said that factors such as the "topping up" of borrowing with more mortgages or unsecured loans needed to be considered when devising a regulatory system.

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