Lenders giving first time buyers a break with deposits

Tue, 03 Nov 2009

The number of mortgages requiring buyers to put down a deposit of 20 per cent of a property's value has eased slightly over recent weeks.

Spelling good news for prospective first-time buyers, market research carried out by Moneyfacts found that the number of products in this bracket has fallen from 136 to 117 over the past month.

At the same time, there are now 226 mortgages on the market which call on buyers to put down a deposit of just 15 per cent, compared to 189 in September.

Welcoming the findings, Moneyfacts' Darren Cook said that it is "encouraging" to see mortgage rationing easing, with growing competition among lenders and higher levels of confidence in the market cited as reasons behind the trend.

"[This] might be an indication that some mortgage providers have kept an eye on the housing prices, regained some confidence and realigned their outlook towards risk," he said.

At the same time, however, the research found that two in three mortgages still require at least a 25 per cent deposit.

The Building Societies Association (BSA) recently reported an upturn in mortgage approvals in September, though figures are still down on a year-on-year basis.
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