Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Mortgage firms demand 20 per cent deposit from FTBs

Mortgage firms

Deals for those with a 15 per cent deposit are disappearing as more than 300 deals have been pulled off since the beginning of the year

First-time buyers (FTBs) are being asked to save at least 20 per cent for a deposit on a house as there are little deals for mortgages on the market.

In the past week, not one high street bank has offered mortgages for those with a 10 per cent deposit according to The Times.

Brokers have also warned that deals for those with a 15 per cent deposit are also disappearing as more than 300 of them have been pulled since January.

For those with smaller deposits there are only a small number of these deals available.

According to Moneyfacts, there are only 44 deals left for those with a 10 per cent deposit, but most have restrictive criteria.

David Hollingworth from the mortgage broker London & Country said that its already a ‘big ask to require a first-time buyer who has scrimped and saved to come up with a bigger deposit’.

This comes after Rishi Sunak’s stamp duty holiday, which can save buyers up to £15,000.

The Chancellor said he would immediately raise the threshold on stamp duty to £500,000 until March 31 2021.

The measure, which temporarily increases the ‘nil rate’ band of stamp duty from £125,000 to £500,000, will reduce the average stamp duty bill for a main home from £4,500 to zero.

The Chancellor’s crucial coronavirus recovery package includes a six-month ‘holiday’ from paying the charge on most homes to kick-start the market.

However, economists voiced alarm at the idea that the move could be announced to the House of Commons, but not implemented until the Autumn.

Fears were raised that purchases would grind to a halt as people would simply wait in order to save thousands of pounds.

But UK house prices hit a record high following a post-lockdown boom, with the average home now worth £245,747.

A newly-released report by Halifax said property prices were 5.2% higher than the same month a year earlier and property values were up by 1.6% month on month.

But with household incomes under pressure and job loss announcements mounting, the report said it is ‘highly unlikely’ that current levels of house price growth will be sustained.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.