A quarter of housebuyers are keen to avoid mortgaging to the max, and about the same proportion are prepared to cut back on other spending to afford their home.

To the Yorkshire Bank, the author of this research, this means that “housebuyers across the country are increasingly taking prudent steps to reduce the risk of mortgaging to their financial limits, as the possibility of the fifth interest rate rise in under a year looms large”.

Excuse me?

What about the three-quarters who are willing to mortgage to the max or refusing to cut back on other expenditure?

If, as expected, the Bank of England raises rates again next week, they could soon be regretting their financial pig-headedness.

According to the Yorkshire, more than three-quarters of first-time buyers anticipate further rate rises over the next 12 months.

Yet, only a third plan to avoid stretching their finances for fear of how these could affect them.

What about the rest? Are they insane?

In this overheated property market, it’s completely unrealistic to expect to buy with a huge mortgage and not have to cut back on other things.

Anyone who thinks that way is sleepwalking towards financial meltdown.

This entry was posted on Tuesday, May 29th, 2007 at 8:06 pm and is filed under UK Mortgages, UK Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.