Alliance & Leicester warns potential homeowners over debt

Alliance & Leicester has claimed that 75 per cent of prospective first-time buyers already have outstanding debts as they are saving for a mortgage.

The majority of people planning on moving into their first home already have arrears of nearly £6,000, yet still hope to get on the housing ladder within two years, the lender claims.

London residents are surprisingly efficient at managing their debt, the research found, as despite the high cost of living in the capital they have an average debt of £5,350.

This is compared to the West Midlands, where the average first-time buyer has £6,870 of debt.

Men were found to have higher average debt levels than women, with arrears of £6,290 compared to £5,400. People in their late 20s have the biggest debt problems of all age groups, owing an average amount of £6,000.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "Our research reveals that while many first time buyers are diligently saving for their deposit, some are not being as financially frugal as they could be.

"Whilst buying a house can seem like a top priority, those looking to buy for the first time will find it worthwhile to pay off their outstanding debts first."