Mortgage lenders responsible for 'fragile' first-time buyer confidence

24-Jun-2008

First-time buyers are experiencing increasingly fragile confidence as a result of mortgage lender activity, it has been claimed.

Deeming first-property buyers "the lifeblood" of the housing industry, market analysts at comparison website moneysupermarket.com said mortgage providers have distorted the landscape for such individuals over the last year.

"The mortgage market is unrecognisable today, with the sheer number of products decreasing every day - from more than 30,000 in August 2007 to around 5,000 today," observed a spokesperson for the site.

"In addition, the average cost of borrowing has risen steadily since December despite three base-rate reductions," added the representative.

Stating that lenders have done "a complete U-turn" regarding the risks they are prepared to take, moneysupermarket.com suggested this has specifically affected borrowers with little or no deposit or equity.

"This in turn directly affects first-time buyers, who are the absolute lifeblood of the housing industry," concluded the site's spokesperson.

Moneyextra.com noted earlier this month that the current deposits required by lenders can amount to tens of thousands of pounds, and this - rather than the Bank of England's base rate - is "crushing the life" out of the mortgage market.

FirstRungNow.com - how to buy a house, from finding your first flat or first house, first time buyer mortgages, shared ownership, buying with friends, gifted deposit, part buy part rent - all a first time buyer could possibly need.

CML figures indicate highest deposits in 3 years Comparison site: Lenders push first-time buyers out of market

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