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First-time buyers take on debt for deposit

30/07/2009

According to a study by moneysupermarket.com, first-time buyers looking to take advantage of the `ailing` housing market by buying a property are taking on debt in order to afford the deposit, pressandjournal.co.uk reports.

More than 1 in 8 of the 18-34 year olds questioned are thinking about buying their first property sometime in the next year, with 16% of them considering taking on debt in the form of a loan to cover the cost of a deposit.

Head of mortgages at moneysupermarket.com, Louise Cuming, said: "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."

A spokesperson for Debt Advisers Direct commented: "First-time buyers who are looking to take advantage of low house prices should be wary of getting into debt to fund their deposits. We would advise anyone struggling to afford a deposit to consider all the alternatives, such as renting a bit longer, before taking on debt like this."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

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