First-time buyer shift to tracker mortgages

Research by the Council of Mortgage Lenders (CML) shows that first-time buyers are increasingly opting for tracker mortgages.

Sue Anderson, a spokesperson for the Council, says that the security offered by a fixed-rate mortgage is becoming less attractive to some borrowers as there is “some anticipation that rates may fall again this year”.

Borrowers opting for a tracker mortgage stand to benefit if the Bank of England cuts interest rates again later this year.

Ms Anderson described the situation as “complex” and points out that first-time buyers do not form a uniform category.

However, see believes those seeking to purchase their first property are looking for a “trade-off between flexibility and certainty, in particular with relation to interest rates”.

Meanwhile, a survey conducted by Abbey Mortgages has revealed that four times as many potential first-time buyers are spending some of their deposit savings, compared with this time last year.

The research shows that 42% of those hoping to get a foot on the property ladder have spent a combined total of £1.9 billion from their nest eggs.

Fifty-three per cent of those questioned cited a rise in the day-to-day cost of living as a major reason for raiding their funds.

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