First-time buyers in financial strife

Research found that nearly half of new homeowners could only survive six months of mortgage payments if they lost their income, but this could get worse thanks to rising bills and debt, the Post Office said.

“First-time buyers tend to overstretch themselves, but need to consider what they would do if they lost their income,” said the Post Office’s Claire Oldstein.

“It’s unlikely they will have a big enough rainy day fund to rely on – especially after pulling together a deposit.”

The announcement comes as Council for Mortgage Lenders data last week showed that repossessions and arrears are at their highest rate in five years.

Despite the high costs of repayment, 45 per cent of first-time buyers in the poll lacked protection in case they lost their income, with a third thinking they did not need it.

Ms Oldstein said that while getting protection could seem like another unwelcome debt, it could save a house from repossession.