Required Deposits Still Too High

The size of the deposits required to purchase a UK property at the moment is still too high, according to one expert highlights Zoopla. Paul Hearnden, a director at MyMortgageDirect, said the deposit that first-time buyers need to put down is "too big", mainly due to banks protecting their balance sheets.

His comments follow the publication of a report by the Council of Mortgage Lenders which showed that, while the amount of unmortgaged housing wealth held by individual borrowers differs greatly, the aggregate loan-to-value ratio on mortgaged property in the UK is less than 60 per cent.

The data also revealed that, even when allowing for recent house price weakness, the vast majority of individual borrowers have a "substantial cushion of equity" in their homes.

Mr Hearnden said a big factor responsible for the lack of borrowing is insolvency issues and the rules that have come in - a problem he said is "stifling" the market.

He added: "The only way that we're seeing first time buyers being able to get that much deposit together is [where] their parents are remortgaging their properties to release equity or giving them savings required to put down a big enough deposit for them to get on the housing ladder."

The opportunity to get interest fee mortgages appears to be slim in the current markets. The muted activities make it impossible to penetrate through the cold state market and own a house with at a decent mortgage deposit.

On the other hand inflation and unemployment are playing their full role from keeping people to own a house. Those who are successful in making a deposit, find it harder to cope up with the increasing interest rates.

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