The latest research from the Nottingham Building Society has shown that over 1 in 3 first-time buyers have missed out on purchasing a property because their deposit was too small and around half had more than 10% of the purchase price saved.
According to the figures, 35% of would-be first-time buyers saw house deals fall through in the past year because their deposit was too small to secure a mortgage. Around 18% say they had a deposit of less than 10% while 17% had less than 20% of the house price they were planning to buy.
Council of Mortgage Lenders figures show total borrowing by first-time buyers hit a record of £53.2 billion last year with more than 338,900 loans completed and that the average loan-to-value is currently around 84.3% on loans of £132,400.
But The Nottingham’s research found first-time buyers are still struggling to buy the homes they want despite having saved deposits. More than half (51%) of first-time buyers say they have a deposit saved before looking to buy.
Ian Gibbons, Senior Mortgage Broking Manager at Nottingham Mortgage Services (part of The Nottingham), said: “Borrowers with small deposits have a wide choice of loans to pick from but clearly many are struggling to buy the houses they want with so many potential deals falling through.
It is particularly worrying that borrowers with a 10% deposit or more are struggling. They should be able to secure a mortgage and not have to miss out on house purchases simply because their deposit is too small.
The withdrawal of the Help-to-Buy mortgage guarantee scheme will have some impact but in general the advice is always to search the market and get specialist advice on the range of options available.”
Content taken from the latest news at Property Reporter.co.uk