First-time buyers warned against using debt for deposits

30-Apr-2008

First-time buyers are taking a risk by using debt for deposits, an expert has warned.

This comes after a report by iammoving.com found that 30 per cent of first-time buyers are funding a deposit for a home with unsecured loans, borrowings and credit card debt.

According to the research, only 42 per cent of buyers who have recently secured a property did so by the safest method - using their savings.

Simon Preston of iammoving.com said getting on the ladder was still a priority for many first-time buyers, no matter how it was achieved.

"There is a huge risk in taking out unsecured borrowings to raise a deposit as a first-time buyer. A small shift in prices and a change in circumstances can see someone losing their house and financial security very quickly," he said.

According to the National Association of Estate Agents, the number of first-time buyers in the UK property market fell significantly in March this year.

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