Firstrung: Outpriced first-time buyers should "save and sit it out"

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Firstrung: Outpriced first-time buyers should "save and sit it out"

Thu 3rd Jul 2008

First-time house buyers should save as large a deposit as possible while waiting for the housing market to stabilise, Firstrung has advised.

The first-time buyer solutions company believes that the mortgage market will go to "some kind of normality" and that deposits can be gathered without the fear that prices will go up.

Operations director Paul Holmes said that first-time buyers who are priced out of the market should save up deposits and be careful not to spend them on "peripherals".

A time will come when the deposits can be put to "incredibly good use".

"Instead of having a mortgage of £135,000 you will be having a mortgage of £85,000," he said, adding that over a 25-year mortgage period, a substantial saving could be made.

He advised first-time buyers who were priced out to "save and sit it out" as the market is coming towards affordable prices.

The average first-time buyer put down a 13 per cent deposit in April, the highest in three years, according to Council of Mortgage Lenders figures.

First-time buyers typically took out loans for 3.3 times their income.

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