There has been a significant drop in the number of mortgages available for first time buyers and borrowers with smaller deposits over the past 12 months, according to MoneySupermarket.
The comparison site found the number of 90% mortgages has fallen by 26% from 330 products this time last year to the 244 today.
Meanwhile, in the last six months the number of mortgages available for loans up to 95% of the property’s value has fallen by 43% from 49 products to 28.
There has also been a significant reduction of mortgage options for first time buyers. In the last 12 months, first time buyer mortgage products have fallen by 31% from 1,786 to 1,225.
A number of lenders that were offering 95% mortgages six months ago have since withdrawn them from the market. These include Cambridge, Ipswich, Nottingham, and Skipton Building Societies.
“Our analysis shows the continuing difficulty facing first time buyers and those with smaller deposits looking to find a suitable mortgage,” said Clare Francis, mortgage spokesperson at MoneySupermarket.
“Despite the launch of the Funding for Lending Scheme which was designed to encourage further mortgage lending by the banks, there appears to be few signs that the initiative is helping those with small deposits.
“It is still early days and we won’t see any data on the impact of the initiative until the end of the year, but so far there is little to indicate that the scheme will kick start the beleaguered mortgage market.”