The Law Society has sent out a strong warning to first-time buyers to be wary about affordable housing schemes.
It warned that first-time buyers remained vulnerable to repossession.
The Society said that despite low interest rates and affordable housing schemes aimed at making it easier for buyers to get on to the property ladder, they should take careful advice first.
Law Society president John Wotton said: “A significant number of repossessions take place against first-time buyers who often do not fully anticipate the nature and significance of the responsibilities they are taking on. As a group they are at the greatest risk of negative equity.
“Having never been through the process before, first-time buyers may need a more detailed explanation of the way the transaction works and the nature of the obligations they are assuming. In many cases they may receive financial help to buy from relatives and so there may be third-party interests to consider.
“Many couples who are first-time buyers, especially those who are not married, need to record their respective interests in the property. Failure to do this can result in disputes, and court proceedings.”
The warning from the Society comes as affordable housing schemes, such as the Government’s FirstBuy initiative, and shared ownership schemes grow in popularity. Recent figures from Halifax show that such schemes now account for 13% of private and housing association sales.
FirstBuy offers an equity loan of up to 20% to first-time buyers, while shared ownership schemes allow first-time buyers the chance to part buy and part rent the property, increasing their share in the home through rental payments.
The Law Society said first-time buyers should talk through all their options with a solicitor before making any decisions.
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