Rising house prices are making it harder than ever for first time buyers to get a foot onto the property ladder.
And lenders are not doing enough to help according to Andy Frankish, director or Mortgage Talk Direct, the national direct department of Mortgage Talk.
He says: “Many prospective buyers, especially in the London and South East hotspots, are finding it impossible to save enough deposit to get them into their first home. This means that they are continuing to live with parents until well into their thirties, or resorting to renting instead. And, this is having the effect of distorting the property market, as the pool of first time buyers starts to shrink.”
According to the company, lenders are still subscribing to the principle that the bigger the deposit, the better the mortgage deal, with the result that first time buyers are being neglected in the marketplace. This is having the effect of discouraging first time buyers from entering the property market which will, in turn, cause a negative pressure on house prices.
Frankish's comments have been underlined by recent statistics from Internet bank Egg, which state that the average deposit for first time buyers has quadrupled since 1996, and is rising at a rate of almost 7% a year. As aresult, the average first time buyer in 2001 was 34 years old, a figure that Egg claims will rise to 36 by 2011.