First-time buyers rent while saving for home mortgage deposit
Nearly a quarter of first-time buyers have already saved up the money they need to put down a deposit on a mortgage, according to new research.
New research by financial website moneysupermarket.com has revealed how those taking their first steps onto the home mortgage market are planning to gather up the money required for a deposit.Figures from the site show that 13 per cent of 18 to 34-year-olds are looking to buy a house in the next 12 months, but they will need a plan in place to ensure they can afford to put a deposit down on the mortgage.
A shrewd 23 per cent of first-time buyers have already saved up the cash, while the largest group of people questioned said that they would rent until they had done the same (29 per cent).
The average deposit on a home mortgage for those new to the housing market is £32,000, according to the site, so it is "no mean feat" for those who already have the funds ready to go.
Other options for first-time buyers included relying on parents to chip in with some cash (18 per cent), taking out a loan (16 per cent) and waiting until house prices drop further (14 per cent).
However, Louise Cuming, head of mortgages at moneysupermarket.com, warned against some of these options: "Taking out a loan to pay for a mortgage deposit is a dangerous move, and must be avoided even if it means you have to delay buying your first home.
"Anyone who takes a loan is effectively taking out a 100 per cent mortgage through the back door."
The first four months of 2009 saw an increase in the number of home mortgages taken out by first-time buyers, according to the John Charcol Index.
Monitoring home mortgage activity on a monthly basis, the new index's recent measurements show that housing loans taken out by first-time buyers rose by 3.75 times over the period, despite the lack of low-deposit deals on the market.
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