Date Published 20 March 2013
Over one third of first-time buyers want 100% mortgages, and one in five would be happy with a 120% loan.
The findings come in research by discount website MyVoucherCodes, after it noticed a rise in the number of searches on-site for the term ‘first-time buyer 100% mortgages’ and ‘120% mortgages’.
The site polled a total of 1,699 UK adults who were currently in the first-time buyers’ market, i.e. those looking to secure a mortgage at present.
Respondents were given information on the concept of 100% mortgages and 120% mortgages, including being told of the risks of negative equity.
When asked if a 100% mortgage was something they would consider if one was available to them, more than a third of respondents (34%) said ‘yes’, while 21% of the respondents said they would consider a 120% mortgage.
Despite all respondents claiming to be in the market to buy a house and secure a mortgage, the average deposit saved so far was just £3,500.
Mark Pearson, chairman of MyVoucherCodes, said: `Although there are various schemes out there to encourage first-time buyers, like 5% deposits on new homes, it’s just not enough to make it viable for some people.
`However, 100% mortgages are not a good idea and it’s worrying that so many people would consider risky lending schemes like 100-120% mortgages.`
* Meanwhile, separate research by Clydesdale and Yorkshire Banks has found that most first-time buyers want three-bed homes because they want to live there for some time. It found that 29% want three-bed houses compared with just 5% who would want a one-bed house. More than a fifth are hoping to live in their first homes for ten years or more.