First-time buyers looking to have a last 'financial fling' before starting their mortgage payments are being warned by Alliance & Leicester to be careful with their money.
A fifth (19 per cent) of the prospective first-time buyers surveyed by the bank said they would splash out one last time before they settled into property ownership.
And with an average final fling costing these first-time buyers £5,000 – money most commonly spent on cars and holidays – it's clear young borrowers are being a little reckless with their cash.
"Our research shows that first-time buyers plan to indulge before getting onto the housing ladder," said Richard Taylor, head of mortgages at Alliance & Leicester.
"Understandable as this may be, splashing out on a treat to the tune of £5,000 needs to be considered and budgeted for carefully. Buying your first home can be a costly process and first time buyers need to be practical about what they can and cannot afford."
However, the vast majority of first-time buyers are aware of the initial costs of taking on a mortgage, with close to three quarters (70 per cent) of them planning to make savings as soon as they get their first home.
The Bank of England's decision to push up interest rates has seen the cost of mortgages also go up. Another rate rise is expected by the end of the year, which could further squeeze first-time buyers.To read more about mortgages, click here.
© Adfero Ltd