The study found 75 per cent of potential buyers had outstanding debt, yet 70 per cent claimed to be actively saving for a deposit. While the remainder still had aspirations to get on the property ladder, they admitted to not saving anything towards a deposit, instead choosing to pay off credit card debt.
Regionally, those in the West Midlands had the most debt, at £6,870 per potential FTB with those in the East of England in debt by £4,210 each. And despite the expense of living in the capital, Londoners had an average debt of £5,350.
Rod Murdison, proprietor of Murdison & Browning, was unsurprised by the figures. He said: “FTBs are in an increasingly difficult position. Most people’s income will go on day-to-day living and from a sensible financial point of view, FTBs have got to get rid of their most expensive debt first, which is usually their credit and store card balances. There’s no point talking about mortgages until that debt is gone. But there’s no easy answer for first-timers.”
Stephen Leonard, director of mortgages at Alliance & Leicester, said: “Some FTBs are not being as financially frugal as they could be. While 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.
“Many mortgage lenders now use affordability calculations to determine how much they can lend a potential borrower and these calculations take into account outstanding debt and reduce the loan amount on offer accordingly. It’s important to keep up with your payments as any missed payments or defaults could impact on your ability to get a mortgage later on.”
