First time buyers mortgage approvals fall.
Tightening of UK lending criteria has seen first-time buyer mortgage approvals fall to their low level in nine months.
According to a new report by e.surv chartered surveyors, first time property buyers are being hard hit by banks who are now less prepared to extend their mortgage offers to would-be buyers with small deposits.
There are currently various schemes and incentives aimed at the low deposit first time sector but approval for some can be difficult. The eurozone crisis and increased mortgage funding costs are being blamed by lenders for their reduction in lending.
Mortgages on houses up to £125,000 fell 5% for the month after the end of the stamp duty holiday. Lenders average deposit requirements have also increased to over 40% which is the first time since last February. This further strengthens the BoE view that the rate of lending to those with small deposits could slow down over the summer.
A spokesperson for e.surv has said that up to early spring mortgage lenders managed to absorb funding cost increases. However UK lenders are no longer in a position to sustain high LTV lending and are therefore scaling back first time buyer mortgage lending.
It is hoped that mortgage lending conditions will improve when wholesale market turmoil eases which could mean lending to first time buyers may pick up again.
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