First-time buyers 'have fewer options'

first-time buyers in the UK are finding that they have fewer mortgage options available to them, as the recession rumbles on, which may mean that renting a property is advisable at this time.

Indeed, according to Moneyfacts, borrowers who have saved a ten per cent deposit for a new home have seen only a 0.12 per cent reduction in the average mortgage rate, although the cost of funding to lenders has fallen 4.35 per cent.

This means that such borrowers will only benefit from an £11 saving each month on a two-year deal on a £15,000 mortgage.

Yet the group states that in comparison, people with a 40 per cent deposit have seen a 1.86 per cent decline in the average mortgage rate.

Spokesperson at Moneyfacts Michelle Slade said: "first-time buyers, once seemingly the lifeblood of the property market are now apparently being ignored as lenders continue to cherry pick lower-risk borrowers."

In light of this, Britons may find that flats to rent in Wandsworth and other parts of London are a cheaper alternative to buying, as house prices in the city are typically high.

Nicholas Leeming, director of propertyfinder.com, recently stated first-time buyers were continuing to get a "raw deal".

Written by Andy Britten

Published 22nd September, 2009

© 2009 Estates IT Limited