Homebuyers ‘prudent’ over mortgages
May 31, 2007 by admin
Filed under News, News-Mortgages
Homebuyers are increasingly prepared to take special measures to avoid getting a mortgage that will push them to their financial limits.
As the Bank of England continues to increase interest rates, many first-time buyers are cutting back on other expenses so that they will be in a better position to cope should rates rise further.
Research by Yorkshire Bank shows that 24 per cent of buyers are keen to avoid maxing out on a mortgage and this is leading to a change in lifestyle for many.
Almost a quarter of those asked said that owning their own home is so important to them that they are prepared to give up holidays, nice cars and cut back their social life to be able to afford one.
With 77 per cent of Brits apparently expecting further interest rate rises in the next year, it is little wonder that so many people are looking ahead and do not want to strain their finances too much.
“What our survey shows is prudence, not panic – all the signs are that the market will still remain strong,” commented Gary Lumby, head of retail at Yorkshire Bank.
“But with rises in the Bank of England’s base rate and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become a little more cautious with their borrowing.”
The research also found that 70 per cent of buyers expect house prices to increase in the next 12 months but only 17 per cent are prepared to offer the full asking price right away.
