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Young homebuyers taking risks on mortgages

One in six (15 per cent) of young adults are prepared to borrow over four times their annual salary to get on the housing ladder, according to a new survey.The research by friendly society, LV= showed that young people are willing to take bigger financial risks than they can afford to buy their own home, and are often neglecting to take out financial protection.A third (30 per cent) of those questioned said they would pass on financial protection to take out the largest mortgage they could afford.Nigel Snell, communications director at LV= said: "Home-owning has long been a national passion, and one which continues to cascade down the generations; but what concerns us is just how many younger buyers are prepared to stretch themselves well beyond traditional lending limits without arranging adequate financial protection. "These were hypothetical responses and we fear that, under genuine pressure to realise their home-buying dreams, many more buyers will choose to walk the mortgage highwire without a financial safety net." Rising interest rates deemed not to have done anything to discourage those questioned from being prepared to take out such large mortgages. Mr Snell added: "A looser set of borrowing habits is taking root among younger generations of home-buyers. "We understand the pressures and realities of today's housing market, but we urge young families and individuals to think very carefully before deciding to omit financial protection from their home-buying process."

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