First time buyers (FTBs) are prepared to take bigger financial risks to fund their property purchases, undeterred by excessive borrowing costs and rising property prices, new research reveals.
According to Yorkshire Bank, FTBs are twice as likely as other buyers to offer above the asking prices, indicative of the fact that many buyers are prepared to take the monetary risk to secure a desired property.
It is thought that many FTBs are seeking mortgages up to five times their salary repayable over 25 years and more, despite higher interest charges in the long run, suggesting they are prepared to forego the best mortgage rate in order to get on the property ladder sooner.
More than a quarter of FTBs surveyed are prepared to offer more than the asking price to buy sooner rather than later.
“To try get onto the property ladder now before prices are totally out of reach, first-timers are taking greater financial risks,” explained Gary Lumby, Yorkshire Bank’s head of retail.
“Saddling themselves with such huge debts isn’t wise as they could still be paying off their mortgage well into their 60s or even 70s,” he continued.
It was recently reported by Halifax that the average price paid by FTBs topped £150,000 in 2006.
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