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 It is now over 6 months old so the content may be out of date.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

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