First-time buyer mortgages 'hit lowest level since 1993'

Friday, 23 April 2010 10:05

By myfinances.co.uk staff

The number of mortgages granted to people looking to buy their first home dropped below 350,000 for the first time since 1993 in the 12 months to February, new figures have shown.

Research carried out by GfK Financial showed that 347,000 people secured a home loan during the year, down by more than 50% from the peak of the market in 2004-05, when there were 700,000 mortgages for first-time buyers.

It added that around 800,000 people under 30 hope to get on the initial rung of the property ladder this year, but less than half are likely to achieve their aim.

GfK said that the main factors behind the drop in first-time buyer mortgages were restricted lending, static incomes and an inadequate supply of properties.

Commenting on the figures, Helen Adams of FirstRungNow.com said that another major problem is the size of deposit that people looking to buy must raise, as most financial institutions remain unwilling to lend more than 85 to 90 per cent of a property's value.

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