Shrinking mortgage market hits first-time buyers

FIRST-TIME BUYERS in England face needing to raise around £12,000 more if they now find they need to put down a 15 per cent deposit rather than 10 per cent, according to analysis.

The number of five per cent and 10 per cent mortgage deals on the market now stands at just a fraction of the amount before the lockdown.

If a 10 per cent deposit is required, people taking their firststep on the property ladder in England may need to put down around £24,000 typically, according to analysis by Rightmove, based on the average price tag on a typical first-time buyer home.

But if a 15 per cent deposit is needed, then a buyer may need a deposit of around £36,000 - with the £12,000 difference perhaps coming from their own savings or the “bank of mum and dad”.

England’s housing market reopened for business last week.

But those hoping that now is their chance to get on the property ladder will find that many low-deposit mortgage deals have vanished while the housing market was on pause.

Figures from Moneyfacts.co.uk show that, as of yesterday, there were just 30 deals available for those with a five per cent deposit - less than a tenth of the number two months ago.

Some 387 five per cent deposit deals were on the market on March 19.

The number of 10 per cent deposit deals available has also nosedived, to 87, from 782 two months ago.

The choice of 15 per cent deals has also dwindled over the past two months. The shrink back has been less severe, falling from 677 15 per cent deposit deals on March 19 to 251 by yesterday.