First time buyers 'avoiding financial insurance'

30-Jul-2007

More first time buyers are opting to do without financial protection insurance in order that they can borrow an even larger amount of money to get onto the property ladder, new research suggests.

A study by LV= found that "looser borrowing habits" were becoming more acceptable among the younger generations, with almost a third of those under-35 saying they would avoid insurance in order to push more money into mortgage costs.

Higher property prices in London are the likely cause for the seven per cent of those in the capital and the south-east who are prepared to borrow six times their salary.

"Home-owning has long been a national passion, and one which continues to cascade down the generations; but what concerns us is just how many younger buyers are prepared to stretch themselves well beyond traditional lending limits without arranging adequate financial protection," commented LV= communications director Nigel Snell.

An inability to afford mortgage payments was cited by 19 per cent of recent graduates as their main obstacle to purchasing a home, according to a Scottish Widows survey released last week.

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