A number of first time buyers are struggling to scrape a deposit together because they can’t stop spending it, according to research from Abbey.
Their survey has found that one in ten people admit to dipping into their deposit savings almost every month, while one in five said they do so every few months.
With more than 800,000 doing so every week, it comes as little surprise that whose who are guilty of ‘deposit dipping’ showed a strong interest in 100% mortgages, where no deposit is required to secure a mortgage and the entire amount of the property can be borrowed.
Managing director of Abbey for Intermediaries, Ricky Okey, said “As surprising as the research is, it goes a long way to explaining why so many are finding it hard to get on the property ladder, and why of the first time buyers we spoke to we found that there is a strong demand for our 100% mortgage, as many have not been able to save a deposit large enough.
Research from the Council of Mortgage Lenders (CML) substantiates the findings in their ‘FTBs – the decision to buy’ report from July 2005, which confirmed that a large number of first time buyers said 100% mortgages were the only way they could afford the property they want.
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