First time buyers 'over-stretch' to climb property ladder

01-Nov-2006

First time buyers are increasingly overstretching themselves to secure a place on the property ladder, new claims suggest.

According to a study by the Mortgage Advice Bureau (MAB), with property prices now exceeding £152,000, first time buyers are increasingly resorting to mortgages with loan-to-values (LTV) in excess of 100 per cent.

Figures released by MAB indicate a 70 per cent increase in borrows taking mortgages that exceed an LTV of 100 per cent.

"With increasing numbers of mortgage products targeted at first time buyers and promising to make the first step on the property ladder easier, the incentive to borrow more than the value of the home they desire is becoming a very appealing solution," said Brian Murphy, lending manager from MAB.

Although high-LTV mortgage products are often taken because a first time buyer has been unable to generate sufficient savings for a deposit, other first time buyers are deciding to opt for these mortgages in order to spend their capital on home refurbishments, according to MAB.

MAB is an independent mortgage broker, specialising in remortgage, buy-to-let, overseas purchasing and mortgage products suitable for first time buyers.

For advice on first time buyer mortgages or to find out how much you can borrow and how much it would cost you, contact a good mortgage broker.

Click here for further information on finding a deposit.

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