Mortgage rates deter first-time buyers from taking plunge
Analysis by the Mortgage Advice Bureau shows current loan rates force a quarter of first-timers to think twice, while Yopa says those who do go for it pay over the odds.
More than a quarter of first-time buyers say they are put off buying a property by current mortgage rates.
Research from Mortgage Advice Bureau found that 29% of FTBs mention mortgage costs as being one of the biggest blockers to buying.
And 24% of FTBs are worried that rates won’t drop quickly enough in the coming years for them to be able to afford to buy.
Keeping up payments
A third (31%) of FTBs are also concerned about keeping up repayments, and the general affordability of the loan.
Danny Belton, Head of Lending at Mortgage Advice Bureau, says: “Rates have risen since the summer as shifts in the global economic environment have driven up borrowing costs for lenders.
But, he says: “Deals are still available and innovations like rental recognition products and a growing market for higher loan-to-value mortgages are helping first-time buyers to get onto the property ladder.”
Over the odds
Meanwhile, analysis by Yopa reveals that FTBs are paying over the odds for their homes by almost 8%.
Figures from Rightmove reveal the average asking price for a FTB home in Britain stands at £227,570.
And data from the UK House Price Index shows that the average sold price for first-time buyer homes is £245,208, so first-timers are paying an average of 7.8% over the odds.
They’re so determined to make a purchase, they can easily end up offering higher prices.”
Verona Frankish, CEO at Yopa, says: “It’s great to see first-time buyers keen to get on the ladder to such an extent that they’re paying above and beyond the asking price.
“First-time buyers are, understandably, in the dark when it comes to buying property, and because they’re so determined to make a purchase, they can easily end up offering higher prices.”
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