Buyers 'will take risks' to set foot on ladder

More risks will be taken by first-time buyers in order to get themselves on the property ladder, new research has shown.

Findings from Yorkshire Bank indicate that approximately 80 per cent of purchasers would accept a mortgage that would take 25 years to pay off, with more than half taking on deals worth five times more than their salary.

Furthermore, the group has revealed that more than one infour initial investors will offer above the asking price with their first bid - an increase of 19 per cent compared to January 2006.

And Gary Lumby, Yorkshire Bank's head of retail, claimed such behaviour is risky and could cost buyers thousands of pounds - despite the rise in interest rates.

"Although house prices continued to rise following last year's two interest rate increases - January's rise was so unexpected it may take a while to see how the market reads," he said.

Last month's interest rate change to 5.25 per cent sees the figure at its highest level since July 2001.

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