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

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

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

MONEYFACTS ARCHIVE
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 It is now over 6 months old so the content may be out of date.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 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."

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 Any products featured may be withdrawn by their provider or changed at any time.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

Building societies winning the mortgage rate war

Competition is fierce in the mortgage market, and borrowers may assume that the rates from banks will be significantly lower than those elsewhere. However, things aren’t as they seem, as building societies are the winners of the mortgage rate war.

Homemover numbers fall for first time since 2011

The mortgage market enjoyed a record year in 2016, so it may come as a surprise to hear that the number of people moving home has fallen for the first time in five years, with fewer apparently taking advantage of the market.

2016: the best year for remortgaging since 2009

Remortgaging has certainly seen a surge in activity of late, helped in no small part by the dramatic drop in mortgage rates over the last year, so much so that 2016 as a whole proved to be the best year for the sector since 2009.
 
Close