Rushed purchases ‘may lead to negative equity’

First-time buyers should wait until the market stabilises before buying, it has been claimed.

According to Nationwide, house prices are currently one per cent less than they were this time last year as prices fell for the sixth consecutive month in April.

Change of address service has warned that first-time buyers should wait till the market stabilises in the medium-term.

The firm’s business development director Peter Beckett explained: “If you rush into something now, you could find yourself in a negative equity position, having borrowed in order to be able to afford to secure the property in the first place.”

Mr Beckett also advised first-time buyers to avoid unsecured loans and credit cards.

For those who do not have the advantage of relying on parental support, inheritance or savings, flat or house sharing can spread the cost and responsibility, he added.

According to the firm, 42 per cent of first-time buyers are using savings to fund a deposit, whereas 13 per cent are taking out unsecured loans or a credit card to meet the cost.

© Adfero Ltd

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