Tuesday, May 9, 2006
Category:
Property
First time buyers and existing property owners are finding themselves in increasing levels of debt, reports Reuters, thanks to the rising cost of buying a property.
Surging house prices and large mortgage repayments are forcing more homeowners to take out bank loans or credit cards in order to manage their finances.
Figures show that one in ten first time buyers now relies on a loan or card to fund their deposit, while a fifth are opting to take out a 100 per cent mortgage agreement to cover the costs.
"The levels of debt that first time buyers now have to take on to buy a home is dangerous," agreed David Bexon, managing director of smartnewhomes.com.
Some financial advisors suggest that new homeowners may wish to consider acquiring debt consolidation loans to organise their finances after the expense of getting a foot on the property ladder.
Even those who already own a property are suffering from related debt problems, with an increase in levels of mortgage equity withdrawal in the previous quarter, up from £8.9 billion to £11.8 billion, supporting this claim.
