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First time buyers 'still missing out because of high deposits'

More than one in three first time buyers have missed out on potential home deals because their deposit was too small despite around half having had more than 10 per cent of the purchase price saved.

New research for the Nottingham Building Society shows that 35 per cent 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 per cent say they had a deposit of less than 10 per cent while 17 per cent had less than a fifth 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 per cent 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. Some 51 per cent of first-time buyers say they have a deposit saved before looking to buy.

The Nottingham’s research shows more than two out of five of first time buyers would be comfortable borrowing 15 per cent or more of the purchase price of their first home. Around 10 per cent would be willing to borrow 100 per cent of the price.

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