Age of the 20% deposit dawns: Misery for first-time buyers as mortgage firms demand a FIFTH of price of new home – while existing owners enjoy boom in sales thanks stamp duty freeze
- More than 300 mortgage deals for borrowers with 15 per cent deposit are axed
- Not one high street bank offered mortgages for those with a 10 per cent deposit
- There are 44 deals for those with 10 per cent deposit but with restrictive criteria
First-time buyers are being asked to save at least 20 per cent for a deposit on a house as there are little deals for mortgages on the market.
In the past week, not one high street bank has offered mortgages for those with a 10 per cent deposit according to The Times.
Brokers have also warned that deals for those with a 15 per cent deposit are also disappearing as more than 300 of them have been pulled since January.
First-time buyers are being asked to save at least 20 per cent for a deposit on a house as mortgage deals for those with a 10 per cent deposit disappear
For those with smaller deposits there are only a small number of these deals available.
According to Moneyfacts, there are only 44 deals left for those with a 10 per cent deposit, but most have restrictive criteria.
David Hollingworth from the mortgage broker London & Country said that its already a ‘big ask to require a first-time buyer who has scrimped and saved to come up with a bigger deposit’.
This comes after Rishi Sunak’s stamp duty holiday, which can save buyers up to £15,000.
Rishi Sunak’s stamp duty holiday could save buyers up to £15,000, but first-time buyers are being asked to save at least 20 per cent for a mortgage
The Chancellor said he would immediately raise the threshold on stamp duty to £500,000 until March 31 2021.
The measure, which temporarily increases the ‘nil rate’ band of stamp duty from £125,000 to £500,000, will reduce the average stamp duty bill for a main home from £4,500 to zero.
The Chancellor’s crucial coronavirus recovery package includes a six-month ‘holiday’ from paying the charge on most homes to kickstart the market.
However, economists voiced alarm at the idea that the move could be announced to the House of Commons, but not implemented until the Autumn.
Fears were raised that purchases would grind to a halt as people would simply wait in order save thousands of pounds.
But UK house prices hit a record high following a post-lockdown boom, with the average home now worth £245,747.
A newly-released report by Halifax said property prices were 5.2% higher than the same month a year earlier and property values were up by 1.6% month on month.
But with household incomes under pressure and job loss announcements mounting, the report said it is ‘highly unlikely’ that current levels of house price growth will be sustained.