A fifth of first-time buyers prepared to pay premium on housing

A fifth of first-time buyers in the UK say that they are prepared to pay over the odds and go above the asking price to secure themselves a place on the property ladder.

The number of newcomers prepared to pay a premium to get into the market is a significant increase from 2004, when just 13 per cent said they would negotiate upwards.

Analysts are linking the figures to an upswing in optimism, with 55 per cent saying that they expect to see house price rises, an 18-month high.

“Buyers are starting 2006 in a more positive mood than last year, when there seemed to be a lot more uncertainty regarding where the housing market was going,” said Gary Lumby of Yorkshire Bank, who commissioned the survey.

“The market has been showing some encouraging signs of growth in the last few months. House prices have been rising – albeit modestly – and the number of mortgage approvals is up.

“In fact, the Council of Mortgage Lenders recently reported record December lending figures,” he added.

Mortgage lending is booming as homeowners compare mortgage deals in search of the best mortgage rate.

© Adfero Ltd

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