One in three (29%) first time buyers is concerned that mounting pressure to get on the property ladder will lead them to purchase an unsuitable property, according to Alliance & Leicester’s new First Time Buyer research.

With house prices continuing to rise, 36% of those planning to make their first property purchase in the next year claim panic buying will be their greatest fear as they join the property game. Whilst pressure has taken its toll on recent first time buyers, with 12% expressing concern that their home was a rash purchase as they rushed to buy a property.

The findings are the first from Alliance & Leicester’s new First Time Buyer research – the first annual look into the intentions and attitudes of first time buyers – people who have bought a property in the last twelve months, and those who intend to make a purchase within the next year.

YouGov asked a GB representative sample of 1,200 first time buyers what their biggest worry about buying a property for the first time is.

The key findings were as follows:

WRONG PROPERTY?

29% of first time buyers claim they are most concerned that they will buy an unsuitable property in a rush to join the property ladder. Of those who have bought a property in the past twelve months, one in ten (12%) claim they are concerned that they may have panicked and made the wrong purchase, while 36% of those planning to buy their first property this year are worried pressure to buy may lead to a rash purchase.

FINANCIAL CONCERNS

The findings also show that the average property price for first time buyers has reached £117,600 – a massive increase on the £103,754 recorded by the ODPM at the end of 2002. So it is not surprising that not being able to afford their mortgage payments is the second greatest fear for first time buyers suggesting the need for careful budgeting, good advice and the value of fixed rates for this group. One in five recent first time buyers expressed concern at keeping up their repayments (22%). 18% of people planning to make their first property purchase in the next twelve months claimed this was their greatest worry.

Similarly, getting into negative equity is the main worry for 18% of first time buyers. 11% of first time buyers believe that property prices will drop, the majority of whom (27%) raised concerns of getting into negative equity.

Not being able to afford the upkeep of their property (repairs to roofs, windows etc) is a concern for 7% of buyers. This accounts for 10% of recent home owners, suggesting they may not have taken such issues into account when buying their first home.

Regional findings:

Panic buying is a concern for nearly half of first time buyers in the South West, at 42%, reflecting the recent hikes in prices in this region. In contrast, this is only a concern for 24% of first time buyers in the Midlands.

Not all first time buyers are confident of the sustainability of the property boom. In the South West, 23% of people are concerned that they will get into negative equity – the highest proportion in the UK, perhaps following the recent acceleration in house prices in this region. This is also a concern for Londoners (21%) while just 7% of Scots are worried about negative equity.

People in East Anglia are the most concerned about being unable to keep up with their mortgage repayments, at 32%. Whilst people in Wales are the most comfortable with their levels of borrowing, with just 14% claiming missing payments is a concern.

Whilst they may not be too concerned about their mortgage repayments, 13% of people in Wales are concerned that they will not be able to afford to pay for the upkeep of their property – the highest in the UK. Meanwhile, people in the North East and North West (11% in each region) have voiced concern that survey reports may fail to notice major problems with their property.

Paul Cooper, Head of Mortgages at Alliance & Leicester, said: “We have launched the First Time Buyer campaign as a way of gaining an insight into how the homeowners of tomorrow view the property market, and how they are managing to keep on top of increasing prices. The first findings provide a fascinating look at how people feel about the pressures of getting on the property ladder, and their concerns about the property they buy.

“While some buyers may feel pressure to buy their first home, they should ask themselves two questions - can they afford it and do they want to live there? If they stick to these two basic questions they won’t go too far wrong. We would always urge buyers to seek help from a reputable mortgage lender so they can choose the best mortgage to suit their individual needs.”