Nearly half (48 per cent) of borrowers who purchased a new home in the last 12 months had mortgage deposits of less than 20 per cent, according to a new study by the Nottingham Building Society.
People with smaller deposits are faring well in getting a mortgage, with the average homebuyer deposit in the past year standing at 29 per cent, the research reveals.
More than a quarter (27 per cent) of homebuyers managed to get a loan with a deposit below 10 per cent.
A recent independent study of The Nottingham also found that the number of higher loan-to-value (LTV) products at 90 per cent or 95 per cent has been on the rise. There are currently 605 different mortgage deals at 90-95 per cent LTV, compared to 581 in November last year and to just 325 in November 2011.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, commented:
“Homebuyers are demonstrating their commitment for a deposit as highlighted by the average 29% they are able to put down.
“Many will be using the equity they have built up in their home but it is also clear that people saving for deposits are succeeding in the market as well with nearly half of those putting down 20% or less.
“Securing a deposit is of course only the first step as buyers then need mortgages and prices can vary considerably depending on the LTV which is why searching the market is so important.”
