Young 'ready to take risks to afford house'
Published On 28 July 2007
Young homebuyers are increasingly prepared to take on very large mortgages to be able to afford to get onto the property ladder, new research suggests.Data gathered by LV= shows that 15 per cent of young adults are prepared to borrow more than four times their annual salary for a mortgage.
A third (30 per cent) would also be prepared to forgo any financial protection, instead opting for the largest mortgage they could possibly afford.
Worryingly, seven per cent of young people in London and the south-east would borrow six times their salary in a bid to get on the property ladder.
"Home-owning has long been a national passion, and one which continues to cascade down the generations," explained Nigel Snell, communications director at LV=.
"But what concerns us is just how many younger buyers are prepared to stretch themselves well beyond traditional lending limits without arranging adequate financial protection.
"We fear that, under genuine pressure to realise their home-buying dreams, many more buyers will choose to walk the mortgage highwire without a financial safety net."
Recent findings from Scottish Widows showed that 56 per cent of graduates are yet to get a mortgage and buy their first property.
