Young fear being able to pay back home loans after help

Younger property owners are more likely to have relied on “desperate” measures such as mortgage terms of more than 25 years, loans from family and friends and help from the state such as the Help to Buy scheme, research from consumer group the HomeOwners Alliance found.

Seven in 10 home owners aged between 25 to 34 said they had relied on something which had made their home more affordable, which could also include having taken out an interest-only mortgage or a mortgage deal with a particularly low rate.

But the report, compiled by conveyancing provider myhomemove, showed many fear that they could be storing up problems for the future.

Just under half (49 per cent) of those in this age group who had received added help said they worry about their debt.

Across all age groups, 30 per cent of all home owners say 
they are concerned about their debt.

Nearly one quarter (23 per cent) of young people were worried about being able to pay their mortgage off, one fifth say they are worried they may slip into negative equity and a similar proportion are worried about being able to keep up with their monthly mortgage payments.

The prospect of interest rates eventually rising was a particular concern, with 49 per cent of those who have had extra help saying it will make it harder for them to keep up with loan payments.

The report follows a string of studies which have pointed to house prices continuing to rise strongly, prompting speculation that the Bank of England may take further steps to calm the housing market.