First-time buyers 'dip into mortgage savings'
Published On 3 July 2007
First-time buyers are struggling to raise the deposit on a mortgage because they are too tempted to spend their savings, a new report suggests.Research from Abbey found that 11.2 million people admit that they have dipped into their mortgage savings in the past.
In total, one in ten people use their savings every month and a staggering 800,000 'deposit dip' on a weekly basis.
"As surprising as the research is, it does go a long way to explaining why so many people are finding it hard to get onto the property ladder," commented Ricky Okey, the managing director at Abbey for Intermediaries.
Mr Okey added that there was a strong demand among first-time buyers for 100 per cent mortgage because "many have not been able to save a deposit large enough".
A recent report from the Council of Mortgage Lenders (CML) showed that first-time buyers were increasingly having to spend more of their income servicing the interest on mortgage borrowing - currently they have to use 18.7 per cent of their salary to repay their mortgage interest.
