First time buyers avoiding maximum mortgages

01-Jun-2007

More and more first time buyers are trying to avoid taking on mortgages that would stretch their finances to the maximum in light of rumoured further interest rate rises, it has been revealed.

Research from Yorkshire Bank Mortgages found that 70 per cent of respondents expected the Bank of England to raise the base rate at least once more in the next 12 months, meaning that first time buyers are finding themselves faced with a difficult conundrum.

Just 17 per cent of respondents said they would look to pay the full asking price for a property straight away, despite almost five times this number expecting prices to rise over the next year.

And over 25 per cent of first time buyers would now prefer to take out a fixed-rate mortgage, findings supported by Mortgage Trust research, published earlier this week, which found that fixed-rate mortgage take-up was now at the highest level on record - making up over 60 per cent of the market.

"The recent rises have started to make buyers take a realistic view of what they can and can’t afford and to take measures to protect themselves against unforeseen changes in their personal circumstances," commented Yorkshire Bank's head of retail Gary Lumby.

To find out about those mortgages specifically aimed at first time buyers, see our best buys for first time buyers table.

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