Secured loans advised for potential first-time buyers

The aftermath of interest rates rises has prevented thousands of potential first-time buyers from getting on the property ladder, new figures suggest.

According to research by MoneyExpert, more than 460,000 home loan applications were turned down over the past six months.

Three interest rate rises since August 2006 were said to have added an additional £750 a year to the cost of an average £100,000 variable rate mortgage.

Chief executive Sean Gardner said: "Affordability is the major issue in the mortgage market as recent reports of a drop in the number of first-time buyers demonstrates."

He added that rising property prices meant it was "no surprise" that a Council of Mortgage Lenders survey revealed the level of first-time buyers is at a two-year low.

Mr Gardner advised that homeowners looking to raise money should consider taking out a secured loan, which is a "viable alternative" to releasing equity from property.

Earlier this month, Mr Gardner suggested taking out an interest-only mortgage could see Britons make savings on their home loan repayments.

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