Long Term Mortgages Gaining Popularity With First Time Buyers
Following a recent survey, data has indicated that first time buyers are far more keen to lumber themselves with decades of debt rather than accepting a loan off a family member of friend in order to try and get on to the property ladder. Many lenders have started to offer mortgages of forty and fifty years, and young buyers that are just getting onto the property ladder are prepared to take on this level of debt in order to purchase a property without having to borrow money from family members and loved ones.
The study was carried out by Hotproperty.co.uk and around fifty percent of the first time buyers that were surveyed said that they would be prepared to take on a fifty year mortgage rather than borrow money off people that they knew. The study also revealed that many of the first time buyers that were interviewed saw their property investment as a contributory factor in their retirement, expecting their property to go some way towards financing their retirement.
The Managing Director of Hotproperty.co.uk stated: "Fifty year mortgages are already popular in countries like Japan, and with the UK's property prices very high and continuing to rise, it is not surprising that so many British first-time buyers are interested in assuming these types of mortgage. What is concerning is that a large proportion of them believe that their property will be the mainstay of their pension fund."
One of the main reasons that lenders have started offering such lengthy repayment terms on mortgages for first time buyers is the rising cost of property in the UK, with values rocketing over recent years and making it difficult for first timers to afford property purchase on standard twenty five year repayment terms.
19th December 2006
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