First-time buyers stretching budgets to get onto property ladder

18/12/2009

Prospective first-time buyers are finding it difficult to build up the lump sums they need to put down a deposit and take a step onto the property ladder, it has been claimed.

Earlier this month, the latest Rightmove house price index revealed that asking prices dropped by 2.2 per cent in December 2009, with the average home now going for £221,463.

Despite this, first-time buyers are still struggling to buy, with many unable to take advantage of falling prices as they juggle their personal income worries with trying to come up with a typical deposit of 25 per cent of a property's value.

Commenting on the situation, Lucian Cook, director of residential research at Savills, said: "What we do know is that first-time buyers still have very significant constraints on their ability to enter the market and that is because it is very difficult for them to accumulate the deposit to work within existing loan-to-value ratios.

"That figure is very high, so for them to be able to access the mortgage market, they generally need to be able to rely on the bank of mum and dad."

The Council of Mortgage Lenders (CML) recently reported that the number of loans to first-time buyers increased by 34 per cent between October 2008 and October 2009, suggesting that more people are starting to get a grip on their personal income worries and managing to come up with the necessary deposits.

Tags; Housing Debt and Bills,

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