Thousands of first-time buyers are house deals fall though at the last minute because their deposits are too small, even if they have more than 10% of the purchase price saved, new research shows.
According to Nottingham Building Society, one in five first-time buyers missed out on home deal despite having a deposit of more than 10% in the last year.
The Nottingham said that 35% of would-be first-time buyers saw house deals fall through in the past year because their deposit was too small and around half had more than 10% of the purchase price saved.
Around 18% say they had a deposit of less than 10%, while 17% had between 10% and 20% of the house price they were planning to buy.
Figures from the Council of Mortgage Lenders show total borrowing by first-time buyers hit a record of £53.2 billion last year with. More than 338,900 loans were completed, while the average loan-to-value is currently around 84.3% on loans of £132,400.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, said: “Borrowers with small deposits have a wide choice of loans to pick from but clearly many are struggling to buy the houses they want with so many potential deals falling through.
“It is particularly worrying that borrowers with a 10% deposit or more are struggling. They should be able to secure a mortgage and not have to miss out on house purchases simply because their deposit is too small.
“The withdrawal of the Help to Buy mortgage guarantee scheme will have some impact but in general the advice is always to search the market and get specialist advice on the range of options available.”
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