While first-time buyer house prices have risen following the Brexit vote, the number of low deposit mortgages available to them has fallen at the same time, new research show.
According to the latest AmTrust Moneyfacts LTV tracker, the number of available mortgage loans with a 5% deposit dropped from 249 in July to 238 in August.
This is the second month in a row the number of 95% LTV mortgages has fallen after the UK voted for Brexit.
Figures from the Council of Mortgage Lenders show the average first-time buyer house price hit a 2016 high in June of £161,912.
In comparison, the number of available products for those with larger deposits rose, suggesting it is only those unable to save bigger sums of money that are feeling the effects of Brexit so far.
The number of mortgages for those with 20% deposits rose by the most – from 597 in July to 607 in August.
Simon Crone, commercial director at AmTrust, said: “The early indications are that Brexit has not prevented the upward march of house prices for first-time buyers, making high loan to value critical to those hoping to take their first step onto the house ladder.
“In the wake of uncertainty caused by June’s vote for Brexit it is concerning, but perhaps not surprising, to see the number of available products for those with small deposits going into decline at a time when lender appetite for risk looks set to decrease.
“The availability of loans for those with small deposits received a much needed boost when the Government introduced the Help to Buy mortgage guarantee scheme, yet – while mortgage lending is increasing – lenders appear increasingly focused on lending to borrowers with greater deposits.
“This suggests that Brexit may not be as good for first-time buyers as initially thought. Despite the lower interest rates available, house prices continue to rise and a lack of appetite for high LTV lending will take its toll on first-time buyers.”
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