8
Oct
'Price dip would hit first-time buyers'
First-time buyers could find themselves trapped in their current
properties if prices begin to fall, it has been claimed.
According to research from personal finance website Fool.co.uk, one
in twenty first-time buyers are at risk even if there is only a
small dip in house prices.
Those deemed most vulnerable are homeowners with 100 per cent
mortgages, who could find themselves with negative equity as a
result, a spokesman for the website claims.
Such a development would restrict their choice of shopping for a
second home.
David Kuo, head of personal finance at Fool.co.uk, said: "Borrowers
on 100 per cent mortgages need to be aware that stagnant house
prices may keep them shackled to their uncompetitive lender and
prisoners in their own home until house prices rise again.
"However, they can tip the scale in their favour by ensuring that
they choose repayment mortgages rather than the cheaper
interest-only options.
"They should also overpay their mortgage as often as they can
afford."
