FTBs 'should prepare for negative equity'

First-time buyers (FTBs) should prepare themselves for the prospect of negative equity if they insist on entering the property ladder in the current climate.

That's the opinion of Peter Beckett of IAmMoving.com, who said prospective homeowners would be far better advised to wait until the market stabilises before tying up their wealth in property.

"If I was a first-time buyer, that's what I would do," the property expert declared unequivocally.

"If you rush into something now, you could find yourself in a negative equity position, having borrowed in order to be able to afford to secure the property in the first place."

Recent research by the property website found that three out of ten first-time buyers use unsecured loans, borrowings and credit card debt in order to drum up a home deposit.

Analysts have labelled that strategy extremely risky given the exorbitant interest rates on such loans as well as the property downturn, which continues to devalue UK homes.

News posted on 6th May, 2008