First time buyers looking to secure a 75% LTV mortgage on an average first-time buyer property would now be facing a deposit gap of around £15,500, according to research from unbiased.co.uk.
The data shows the average first time buyer is saving towards a deposit of £22,706, which – with a little bit more – would allow them to access a maximum mortgage of 85% LTV on the average first time buyer house price.
The Department for Communities and Government’s latest figures show the average first-time buyer property cost just over £153,000. Based on the current average deposit first time buyers are saving towards, this allows them access to a maximum of an 85% LTV mortgage. Unbiased.co.uk says that best buy tables show the most competitive 85% LTV they can access is 3.34% for a two year fixed rate (repayment mortgage), which would mean a monthly repayment of around £640.
If first time buyers were to increase the amount they are saving towards by £15,500 this would give them access to a far wider range of mortgages, including 75% LTV deals.
Of those looking to buy, 6% admitted that they had already been turned down by a mortgage lender.
Unbiased.co.uk’s ‘find a mortgage adviser’ search shows enquiries for first time buyer advice from a whole of market mortgage adviser have reached record levels, accounting for on average 38% of mortgage searches over the past year alone.
Karen Barrett, chief executive of unbiased.co.uk, said: “Our latest research highlights the gap between the amount first time buyers are able to save up and what is needed to access the most competitive rates in the market. While saving towards that initial deposit is no easy feat in the current economic climate