First time buyers 'undeterred' by latest rate rise

06-Jul-2007

Yesterday's decision by the Bank of England to raise interest rates to 5.75 per cent was widely seen as one which would cause further problems for first time buyers, but in fact the increase is unlikely to deter many from their existing plans, one lender has claimed.

Bradford & Bingley has said that first time buyers are eager to get onto the property ladder as soon as possible for fear of being in an even more unfeasible situation a few months down the line.

Potential homeowners are increasingly foregoing holidays and social activities as well as working longer hours in order to achieve their aim of owning a property, the firm suggests.

"Having to find an extra £25 per month, at a time when finances are squeezed, is going to hit first time buyers' pockets but our research shows it's not going to deter them. With concerns over future affordability and property prices many are doing everything they can to get on the property ladder as soon as they can," commented Bradford & Bingley director of mortgages Andy Wiggans.

However, Mr Wiggans cautioned against buyers taking on a larger mortgage than they could handle. Earlier this week the Financial Services Authority announced that it was to investigate five sub-prime mortgage brokers amid fears that they had sold loans to consumers with poor credit histories.

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