Low deposit mortgages increasingly difficult to get
Consumers that are hoping to take out a mortgage to buy a property are still facing a tough time according to officials, even thought house prices have been falling for the past year. Availability of mortgages is still very tight as a result of the ongoing global credit crunch, and many lenders continue to take some of their best deals off the market after very short periods of time.
Although the base rate has plummeted by nearly two thirds over the past year many lenders are still failing to pass on these base rate cuts, which means that borrowers may still be paying over the odds on their borrowing. However, there is also another problem that is affecting buyers looking for mortgages, and this is the level of deposit that they need to put down.
Before the onset of the credit crunch the traditional level of deposit that most people put down was just 5 percent of the value of the property, but some consumers such as first time buyers were able to get 100 or even 125 percent of the property value by way of a loan.
However, industry officials have said that things are getting worse and worse when it comes to getting low deposit mortgages, and even 10 percent deposit mortgages are becoming more difficult to find.
Whilst the housing market has picked up slightly in terms of sales figures over recent months, having plummeted to average sales of less than one property per week per estate agent earlier this year, the fact that consumers can no longer get a low deposit mortgage could have a damaging impact on the housing market in months to come.
