Homeowners 'take on larger mortgages to upgrade'
Published On 16 July 2007
UK homeowners are having to take on larger mortgages in an effort to upgrade their current home, a new report found.Research from the Yorkshire Bank shows that homeowners looking to purchase a new property with an extra bedroom will typically have to pay £34,000 more than their existing property is worth - meaning a larger mortgage could be required.
Despite these rising prices, just 26 per cent of people said that higher costs would put them off buying their larger dream property.
"Our research shows people are not being put off by the high price of an extra bedroom, but we are seeing homebuyers become more prudent in their purchases to ensure they can afford their increased repayments," explained Gary Lumby, Yorkshire Bank's head of retail.
The vast majority of homeowners (78 per cent) added that they expects interest rates to increase again in the near future, but only 14 per cent said that they thought they would struggle to make higher mortgage repayments.
"It's crucial not to over-stretch yourself financially and the step up to a bigger home can be a big jump in price depending on where you live," added Mr Lumby.
The Royal Institution of Chartered Surveyors reported that only 10.6 per cent more of its members reported an increase in house prices than said they fell in June.
