Money News
Housebuyers across the country are increasingly taking prudent steps to reduce the risk of mortgaging to their financial limits as the possibility of the 5th interest rate rise in under a year looms large. Indeed, new research from Yorkshire Bank suggests that the Bank of England's measures for reining back rising house prices and curbing inflation are beginning to gain traction as 24% of buyers admit they are looking to avoid taking out a maximum mortgage.
With minimal reserves to fall back on, even first-time buyers desperate to get a foot on the property ladder, are beginning to demonstrate greater caution. The research found almost a third (31%) intend to avoid stretching their finances from the outset for fear a further rate rise might tip them over the edge of affordability. 77% of those surveyed anticipate further rate rises over the next 12 months.
Despite 70% expecting house prices to continue rising over the next 12 months, just 17% would still be prepared to offer the full asking price immediately.
Perhaps surprisingly, only 3% said they were considering changing to a cheaper mortgage to save money. Among first time buyers hoping to get onto the property ladder, 26% say they would prefer a fixed rate mortgage to give some payment certainty in the next few years.
Despite feeling the squeeze currently, with Bank of England Base Rate at a 6-year high, the research shows that homeowners are prepared to make cutbacks in other areas of their life in order to afford their home. Some 24% felt that owning their home is so important to them that they will sacrifice holidays, their social life and nice cars to fund it. The data showed that this was particularly true for would-be first time buyers eager to get onto the property ladder - 36% being prepared to adapt their lifestyle to make that elusive first home a reality.
30 May 2007 © Moneyextra.com
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