Pressure on first-time buyers

Posted: 21 Aug 2006 14:32:57 GMT

            Property News - Pressure on first-time buyers

The financial pressure heaped upon first-time buyers has been revealed in a new study by the Post Office.

The research reveals that almost half (48 per cent) of new homeowners are only six months away from losing their home if a regular household income was taken away.

Rising costs for amenities and the increases in average house prices have all damaged first-time buyers' financial security.

Claire Oldstein from the Post Office stated: "First-time buyers tend to overstretch themselves, but need to consider what they would do if they lost their income.

"It's unlikely they will have a big enough rainy day fund to rely on - especially after pulling together a deposit."

A large proportion of first-time buyers included in the survey said they would have to rely on friends and family should payments become too much.

In addition, one in twenty new homeowners said they would have to sell up if they lost their job.

The boom in house prices is expected to begin to slow, with the effect of the August interest rate rise expected to be seen in September and October.

Many analysts believe that the Bank of England will raise rates again in September, bringing the base rate up to five per cent.

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