First-time buyers 'more careful about debt'
Published On 10 August 2007
First-time buyers in the UK are "slightly more cynical and a lot more careful" than they were previously when it comes to applying for a new mortgage and adding to their debt after buying a home, an industry expert has said.As house prices and interest rates continue to rise, first-time buyers are risking debt if they are not careful about the mortgage they opt for, Paul Holmes, the chief executive of Firstrung explained.
In addition, many first-time buyers opt to borrow more money to buy furniture and carry out DIY work - adding to their debt burden.
Mr Holmes explained: "[A First-time buyer's] mortgage is a big enough debt as it is, so I think incidental costs are perhaps changing things dramatically and are way, way beyond their reach at the minute.
"I think it's very much [a case of saying]: 'I'm in, I'm going to do as much as I can on a budget, and then any major programme of works I'm going to have to put on the back burner'."
Figures from Credit Action show that a person in the UK typically owes £28,600 including their mortgage borrowing.
