5 May 2010

Malcolm Hurlston, the chairman of the debt charity Consumer Credit Counselling Service, has called for first-time buyers to study and sit an exam ahead of receiving a mortgage approval.

Mr. Hurlston claims that those who purchased a property too soon, with little education of the buying process, were the most likely to get into debt. He added that some lessons had still not been learnt, despite the credit crunch and the changed nature of the financial system, with many first-time buyers discovering that home ownership was a “trap”.

Mr Hurlston commented: “The people most likely to get into debt in Britain are those on low incomes who have wrongly or too soon embarked on home ownership. First time mortgages should be sold not with pretty ribbons and tax breaks but with health warnings. They should be sold like driving licenses, after study and an exam.”

He also called for the Financial Services Authority to supervise all first mortgages, and for home ownership certificates for anyone buying a first house.

Sue Anderson, representative for the Council of Mortgage Lenders, said that mortgage brokers and lenders would consider these comments, as there is a case for strengthening general guidance for buyers. A separate, recent report by the National Landlords Association has found that the lack or mortgages and restricted lending for first-time buyers is causing more home movers to rent as opposed to buy in the current market.

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