FTBs and remortgagers 'need significant deposits'

Date:Monday 20th April 2009
Author: Max Freedman

First-time buyers (FTBs) and people seeking to remortgage need deposits of up to 30 per cent, it has been claimed.

According to the Moneyextra.com mortgage index, average loan-to-value (LTV) rates have sunk to a two-year low.

It suggested that the average LTV for FTBs is 71 per cent, compared with 82 per cent last year.

In addition, it was found that the supply of borrowing for FTBs with a ten per cent deposit has decreased by 84 per cent from the same time last year.

"It's a catch 22 for FTBs, the depressed market means there are bargains to be had but it's difficult to get on the ladder without a good deposit," stated Richard Mason, mortgage expert at Moneyextra.com.

He added that although there are loans available, lenders are being "very prudent" on the whole.

Recently, moneysupermarket.com released figures which suggested that the number of mortgage applications rejected has increased fourfold over the last two years.