First time buyers still locked out of UK mortgage market


First-time buyers wanting a mortgage in the UK with small deposits are being left out in the cold, according to a new report.

In the survey by e.surv, a firm of chartered surveyors, who compile the Mortgage Monitor, they say first-time buyers are getting very little help from the government.

That’s in spite of a rise in lending in the mortgage market but this does not extend to those with small deposits – which are considered to be borrowers with 15% or less of the total value of the property.

The survey reveals that the proportion of small deposit borrowers are dropping in number when compared to the market of house buyers overall.

The number of approvals granted in November for those with small deposits was 16.3%, that’s down from October’s figure of 16.5%.

First-time buyers are struggling

A director of the firm, Richard Sexton, said: “First-time buyers are struggling to get loans and there’s little consolation with promises of starter homes.

“In theory, first time buyers should benefit from measures including the extended Help to Buy Scheme as well as the Help to Buy ISA.”

He also pointed out that there are not enough homes available and it’s the supply that needs to be addressed before first-time buyers see real benefits.

In addition, estate agencies Reeds Rains and Your Move also produces a first-time buyer tracker report which also paints a similar picture.

In their report, it has been revealed that sales to first-time buyers have dropped to 28,100 in October, down from September’s figure of 28,600.

UK’s annual bridging loan finance soars in value

Meanwhile, a bridging financing index has revealed that the amount of bridging lending granted in 2015 is now larger than the government’s housing budget.

The news comes from the West One Bridging Index which says that the annual gross lending total for bridging loans has reached £3.2 billion which is, they point out, 60% larger than the housing budget announced in the government’s Autumn Statement.

A director of West One Loans, Duncan Kreeger, said: “Loan sizes over the past few years have grown as short-term finance involves from a tool for individuals to a source of finance for businesses and developers.”

UK’s bridging loan providers

He added that the UK’s bridging loan providers prides themselves on the convenience and speed they offer customers.

The index also reveals that competition between bridging loan lenders is now more intense though interest rates have, on average, been steady through the year to end October on 1.14%.

The size of a typical bridging loan has also grown, it’s now an average £700,000 between September and October, compared to £630,700 for the previous 12 months.