FTBs maintain debts while saving, says research
Research from Alliance and Leicester shows that 75 per cent of potential first time buyers still have outstanding debts while they are saving for a deposit on their first home. Most people who hope to buy a home within two years have £5,860 in debt. Potential homeowners in the East of England have the lowest amount of debt, at £4,210, while the most indebted region is the West Midlands, with an average of £6,870 per potential homeowner.
The research found that only 24 per cent of future homeowner are completely debt free and 30 per cent of those surveyed had not managed to save a penny towards their deposit. Instead, they were repaying debt at the rate of £200 a month. Meanwhile, more prudent potential homeowners are saving £270 a month.
Stephen Leonard, director of mortgages at Alliance and Leicester, commented: ‘Our research reveals that while many first time buyers are diligently saving for their deposit, some are not being as financially frugal as they could be. Whilst buying a house can seem like a top priority, those looking to buy for the first time will find it worthwhile to pay off their outstanding debts first.’