First time buyers are being offered little incentive to join the property ladder, research by Moneyfacts.co.uk has found. Three quarters of the deals on offer to young buyers are fixed rate mortgages, but with rates as much as seven times the base rate, they are being priced out of the market. Rates on variable mortgages offer slightly better value, but still require payments of around three per cent above the base rate. While house prices are falling steadily, the lack of high percentage loan-to-value mortgages means that first time buyers are being asked to commit to deposits of up to 40 per cent, equal to £60,000 on a £150,000 property. Michelle Slade, analyst at Moneyfacts.co.uk, commented: "First time buyers are meant to be the life blood of the property market, but with the average rate as high as 7.02 per cent, there is little incentive for them to step onto the first rung of the ladder." With the importance of saving greater than ever before, mortgage lenders are continuing to look at their savings books to fund mortgages. Potential first time buyers can take encouragement from the fact that new and improved rates are being launched for savers, with fixed rate bonds now paying over four per cent again.
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