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The average deposit put down by first-time buyers in November climbed to its highest level since records began, figures showed today, highlighting how difficult it has become for poeple to get on to the housing ladder.
The Council of Mortgage Lenders (CML) said the average deposit put down by a first-time buyer had risen to 18% – the highest level in 35 years of available data.
Falling house prices have contributed to the increase, alongside tighter lending restrictions introduced by banks and building societies as a result of the credit crunch.
The 100% loans that were available to borrowers at the beginning of last year are now a thing of the past, with many lenders restricting borrowing to those with at least 10% to put down and targeting their best deals at those with more than 40% equity.
The difficulty in getting a mortgage, combined with concern over the future direction of house prices, is likely to be behind a fall in the number of first-time buyer numbers in November.
The CML said just 12,400 loans had been approved for new buyers – down 19% from October's figure of 15,400 and 57% down on the figure for the same month in 2007.
In total, 33,000 loans worth £4.5bn were approved for house purchases over the month, the lowest level of activity since the CML started collating data on this in 2002.
Gross mortgage lending slumped 24% over the month to £14.2bn. This was down 53% on November 2007.
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