Alliance & Leicester warns of 'mortgage phobia'

02 August 2005
Alliance & Leicester has revealed that many potential house buyers are staying off the property ladder because they fear the cost of a mortgage would be too high.

In the building society's quarterly Mortgages movingimproving index, surveys found that more than six million of British adults would rather rent than buy a home, because of concerns about costs.

Nearly a third of those who said they would rather rent, claimed this was because they thought the cost would be too high, while 17 per cent said a mortgage seemed like too great a commitment.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "It seems the cost of a mortgage is the main reason why many people choose to stay off the property ladder.

"Of those who would rather rent, nearly half think a mortgage is too expensive or too much of a commitment.

"People are afraid that mortgages are unaffordable but the reality is that even though a mortgage is a financial responsibility, it needn’t be a burden if people get the right deal to suit their circumstances.

"There is good news for these ‘mortgage-phobes’ - the mortgage market is becoming increasingly competitive and borrowers can take advantage of the increased rivalry between lenders to provide the best products and rates."

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