Many first-time buyers are seeing potential house purchases fall through late on, despite nearly one in five having a deposit of at least 10 per cent saved up.
This is according to research from Nottingham Building Society, who discovered that 35 per cent of potential first-time buyers experienced deals falling through in the last year due to their deposit being too small.
17 per cent of those who saw their purchase fall through had saved up a deposit between 10 and 20 per cent of the house price they were set to pay, with 18 per cent having less than 10 per cent saved.
Total borrowing among first-time buyers reached record levels last year, as figures from the Council of Mortgage Lenders (CML) showed that £53.2bn had been borrowed. More than 338,900 loans had been completed, with the average loan-to-value sitting at approximately 84.3 per cent on loans of £132,400.
“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,” said Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services.
“It is particularly worrying that borrowers with a 10 per cent deposit or more are struggling. They should be able to secure a mortgage and not have to miss out on house purchases 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.”
