Deposits a 'major problem' for first-time buyers

Posted: 19 Mar 2010 10:24:47 GMT

First-time buyers are struggling to raise the necessary cash to put down a deposit on a property, one expert has revealed.

Bernard Clarke, communications manager for the Council of Mortgage Lenders, says the average 25 per cent deposit that is now required to secure a home is proving a "major problem" for this group of purchasers.

His comments come in response to the results of a YouGov survey, commissioned by the National Housing Federation, which found that despite falling house prices, 86 per cent of young people cannot afford to buy a property in the UK.

Some 54 per cent of the group of 18-30 year-olds said they will need financial assistance from relatives in order to purchase a home, while eight per cent stated they did not think they would ever be able to afford a house.

According to Moneyfacts, 57 per cent of mortgage deals that are currently on the market require a minimum deposit of 25 per cent. This stands in comparison to the pre-credit crunch situation when in August 2007 just 16 per cent of loans required a down payment this large.

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