First-time buyers are not benefiting
from property price falls

Loan numbers down caused by fewer deals available

According to research from the mortgage analysts mform, there are just 36 deals available directly from lenders to first time buyers looking to borrow more than 90 per cent of the value of a property. The analysis follows a six-month period which has seen the lowest number of first-time buyers since records began.

First time buyers are being shut out by the majority of lenders while a deposit of 20 per cent is asked for to qualify for many best-buy mortgages. This is equivalent to £37,000 on the average property. The result of this is that just 109,900 loans were issued to first time buyers in the last six months compared to 180,300 over the same period last year.

First-time buyers should be benefiting as property prices fall but unfortunately they are unlikely to be able to benefit as very few have sufficient deposits.

Commenting mform said, "It was easy to see why so few have bought in the last six months. There's little availability when it comes to generous loan to value ratios and the few lenders still offering above 90 per cent tend to charge a little extra to cover the cost of the increased risk of loss in the event of a forced sale. "
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