First-time buyers trapped by high deposits - Mortgages - News - Moneyfacts


First-time buyers trapped by high deposits

First-time buyers trapped by high deposits

Category: Mortgages

Updated: 02/10/2012
First Published: 02/10/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

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, 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."

What's Next?

Find the best mortgage rate - Compare best selling mortgages

Find the best low deposit mortgage for your first home.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

85% of remortgagors benefit from lower rates

Mortgage rates are among the lowest ever recorded, and in the case of fixed rates, they just keep falling! This means it’s never been cheaper to fix your mortgage rate for the long term, and unsurprisingly, remortgagors are taking advantage.

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.