First-time buyers 'should build savings'

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First-time buyers 'should build savings'

Tue, 25 Jul 2006

First-time buyers have been advised that they should build up their savings to generate a deposit.

Research conducted by Alliance &Leicester Mortgages reveals that those looking to secure a mortgage on their first home can be up to £5,000 short of a deposit despite saving for a period of two years.

Alliance &Leicester calculated that first-time buyers looking to save a deposit of £11,710 – which is eight per cent of the average first home – save around £270 month for two years. However, the mortgage lender states that this provides them with savings of £6,570 - a figure that is £5,140 short of their ideal amount.

Commenting on the study, Richard Taylor, head of mortgages at Alliance &Leicester, said: "There is a clear mismatch between how much, and for how long first time buyers are willing to save, and their ideal target deposit to buy their first property."

As such, he advises that those looking to secure a mortgage on their first property should "plan and budget carefully" and cut back on luxury purchases.

This "will all help to achieve their dream more quickly", Mr Taylor added.

Alliance &Leicester has been a member of the FTSE 100 Index since 1997 and offers a range of financial services, including personal loans, savings and current accounts.

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