What Mortgage: Lenders should reduce deposit

Date:Thursday 7th October 2010
Author: Max Freedman

Lenders should reduce the amount of money they expect first-time buyers to have as a deposit in order to get more people back on the property ladder, it has been suggested.

Editor of What Mortgage Ben Wilkie said that homebuyers are struggling to raise the money to purchase a property due to strict lending criteria.

He noted that for an average property, having a ten per cent deposit means that first-time buyers need £20,000 in cash, which is a "huge amount of money for a lot of people".

Mr Wilkie added: "If lending stops at 90 per cent or even slightly above 90 per cent lending, then that is a real danger."

His comments came after e.surv reported yesterday (October 6th 2010) that during September there was the biggest drop in loan-to-values (LTVs) for 12 months.

It revealed that the average LTV fell to 57.2 per cent from 58.1 per cent in August.