Hesitating first-time buyers told to invest wisely

First-time buyers who have delayed a property purchase have been advised to invest their existing funds wisely.

As many as 1.1 million first-time buyers have delayed the purchase of a property amid concerns over the future direction of the market, and consequently have disposable funds available.

Research from the Royal Institution of Chartered Surveyors (Rics) finds this weak confidence in the property market has fallen to the lowest point in 30 years - prompting fears prices could have further to fall.

As a result Abbey Mortgages finds 67 per cent of first-time buyers have chosen to delay a purchase and this could account for a latent pool of funds totalling £31 billion – all of which could be invested in other areas.

Indeed, Abbey argues investing the money wisely over the next 12 months could make potential buyers an extra £2 million in interest.

While housing prices are now only growing by 1.1 per cent, according to house price surveys from Halifax and Nationwide, the annual interest paid on high-interest accounts is could be as high as 6.5 per cent.

As such shifting money into a high interest account could help make deposits grow faster than house prices, and leave first-time buyers in a stronger position next year.

Indeed, investing the average deposit of £28,000, would generate around £1,820 in interest over the course of the year, finds Abbey.

"Those delaying purchasing a home would benefit greatly from moving their deposits into high-interest saving account," said Phil Cliff, Abbey mortgage director.

Despite the concerns over the future of the market, some 624,000 first-time buyers are still planning to invest in their first home in the next 12 months.