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First-time buyers hit hardest by interest rates

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08/02/2007

The recent hikes in interest rates have hit first-time buyers hardest, new evidence reveals.

The proportion of mortgages taken out by first-time buyers in January fell by 10% to 38%, according to mortgage broker Mortgages Direct.

The newly-found confidence displayed by first-time buyers in December dropped dramatically following the Bank of England’s decision to raise the Bank Rate by a further 0.25% in January – its third rise in six months.

Peter Gladdy, director of Mortgages Direct, said: “Although the property market is performing well, borrowers are showing signs of heightened sensitivity to changes in interest rates.

“Speculation of a further rate rise in the first half of the year is making buyers and property investors think very carefully before committing to purchasing a property.”

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