FTBs lose out on properties as deposits ‘too small’
More than one in three first-time buyers saw house deals fall through in the past year because their deposit was too small to secure a mortgage. Around 18% had a deposit of less than 10% while 17% had between 10% and 20% of the house price they were planning to buy.
Council of Mortgage Lenders figures showing growth in total borrowing by first-time buyers, but the Nottingham said many are still struggling to buy the homes they want, despite 51% saving a deposit before looking.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, 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 Nottingham’s research found that more than two out of five (42%) of first-time buyers would be comfortable borrowing 15% or more of the purchase price of their first home. Around 10% would be willing to borrow 100% of the price.