First-time buyers should be wary of new scheme

A scheme claiming to allow first-time buyers to access the best mortgage rates and get onto the property ladder should only be used "where absolutely necessary", Ducalian has said.

Announced last week, the scheme, allows parents of potential buyers of a Barratt home to access a Hitachi Capital unsecured loan to pay off the deposit.

The independent property investment consultancy believes that the scheme will prove popular with buyers, but first-time buyers' parents may think differently.

Timothy Lambert, head of consulting at Ducalian, said: "Buyers still need to save and must learn from what has happened these last four years; property is not a licence to print money in all circumstances."

He warned that any increase in interest rates could push mortgage rates up and lead many people to realise that they have "bitten off more than they can chew in order to own a home".

The Land Registry recently reported that house prices decreased by 0.6 per cent in November to an average of £164,773.
 

Moneyextra.com recommends you take independent financial advice before acting on any article

Back

2011-01-20 13:54:50 © Moneyextra.com