Activity in the first-time buyer market showed little sign of improving during August, with transactions falling back to the same level as last year.
Over the past six months, following the re-introduction of stamp duty for properties valued up to £250,000, sales to first-time buyers have fallen from 24,200 to 18,300.
According to research by LSL Property Services, the fall in transactions coincides with the average first-time buyer house price rising by £6,362 to £141,918.
The average loan-to-value (LTV) has also increased from 78.9% to 81.5% with deposits in August representing 73% of a typical first-time buyer's annual income.
Louise Holmes, finance expert at Moneyfacts.co.uk, said: "Affordability is the biggest challenge facing first-time buyers, despite lenders pledging to offer more high loan-to-value mortgage deals.
"Tough lending criteria and stringent credit checks reflect the fact that lenders are committed to 'responsible lending'; however, it is imperative to the wellbeing of the first-time buyer sector that lenders also begin to offer accessible and cheap mortgages."
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