Many FTBs “overstretched” financially

A large number of first-time buyers (FTBs) are financially overstretched and could find themselves in trouble with their mortgage should they lose their jobs, a new study has found.

According to research by Post Office Financial Services, 48 per cent of FTBs would only be able to meet their mortgage repayments for six months if their regular income stopped tomorrow.

The current levels of finance needed to make the first step on the property ladder are testing new buyers substantially, the study claims, with average house deposits currently around £11,710.

A third of FTBs are then reportedly taken by surprise by household running costs which are higher than they had expected.

“First time buyers tend to overstretch themselves, but need to consider what they would do if they lost their income,” said Claire Oldstein, Post Office head of marketing.

“It’s unlikely they will have a big enough rainy day fund to rely on – especially after pulling together a deposit.”

The Post Office advises that FTBs arrange some form of financial protection, such as lifestyle or payment protection schemes, which could cover mortgage repayments and other monthly outgoings should an individual lose his or her job.