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Almost half of homeowners go close to overspending

Nearly half (45%) of homebuyers pushed their budgets to the limit when purchasing properties in the last 2 years, according to a study by Which?

Out of 2,000 homeowners surveyed by the consumer watchdog, 24% spent less than they had budgeted while 19% who over-budgeted paid more than 15% above their limit.

Around 1 in 3 homebuyers aged 25-29 went over their budget when buying a home, with 25% of first-time buyers overspending. 

Just 19% of homebuyers who have bought before had spent over their planned budgets.

The highest proportion of people who overspent on their budget was in the South East (3 in 10), with a third of homebuyers in Yorkshire were under budget.

David Blake, mortgage advisers at Which?, said:

“It’s important to take a long-term approach and be realistic about affordability when buying property. 

“Given how easy it can be to go over budget, ensuring you have all the right information could not be more important. Seeking independent mortgage advice early on is vital in order to know what options are open to you.”

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Lending to first-time buyers hits 10-year high

Mortgage lending to first-time buyers hit a 10-year high in March this year, research from the Council of Mortgage Lenders (CML) shows.  

While the number of people moving home decreased year-on-year compared to March 2016, first-time buyers received more loans this year than in any month of March since 2007.

According to the CML, first-time buyers borrowed £4.9 billion to get on the property ladder in March 2017 – up 29% in February and 9% on March 2016. 

First-time buyers took out 31,500 loans, up 30% month-on-month and 12% year-on-year.

On lending in the first quarter, the CML’s research showed:

  • first-time buyers borrowed £12.3 billion for home purchases, down 13% on Q4 2016 but up 10% on Q1 2016
  • 78,300 loans were taken out, down 13% quarter-on-quarter but up 10% year-on-year.

Paul Smee, director general of the CML, said:

“The relatively sluggish activity among home-movers stands in contrast to the growth in first-time buyer and remortgage activity, but on aggregate the market is showing broadly the levels of activity we expected. 

“As we head into the summer, both first-time buyer and remortgage lending [are] expected to maintain momentum in the light of the very attractive deals currently available.”

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