Low deposit mortgage numbers fall

Industry officials have reported that there has been a fall in the number of low deposit mortgages that are still on the market. This could cause huge problems for potential first time buyers, many of whom do not have much in the way of savings to put towards a deposit and none of whom have a previous property from which to take equity to put towards a deposit.

Up until the onset of the global credit crunch there were many different deals on offer even to those without a deposit, such as 100% and 125% mortgages.

However, these were pulled from the market following the onset of the credit crunch, and since then things have become even worse for first time buyers. The number of lenders offering mortgages with the traditional 5 percent deposit have dropped significantly over the past year, and now it seems that even the number of mortgages offered to those with a 10 percent deposit are fading.

Industry officials have said that a year ago there were fewer than two hundred mortgage deals requiring a deposit of at least 15 percent, but this has now increased to around two hundred and thirty such mortgages. Many lenders have brought in far higher deposit mortgages recently, and some will not offer competitive interest rates to anyone not putting down a substantial deposit on their loan.

First time buyers have been hit hard by the demand for higher deposits, and this could have contributed to the low level of property sales that has marred the housing market over recent months. Many first time buyers thought that their luck had changed when house prices started to fall, which meant that they could at last hope to afford a property on the open market, but a new hurdle has cropped up in the form of the increased deposits being asked for by lenders.