First Times Buyer Blues Monday, 18th May 2009

Despite the fact that house prices have fallen, analysis from moneysupermarket.com has revealed ,frst time buyers continue to be priced out of the mortgage market.

Just six per cent of mortgage products fall into this category but lots of first itme buyers are looking for a 90% mortgage

If they are lucky enough to get 90 per cent LTV mortgage, they face an interest rate that is 30 per cent more expensive than a 75 per cent LTV mortgage deal.

Despite falling house prices, finding a large deposit is no mean feat, we're generally talking about many thousands of pounds.

Lenders should not be so focussed on the wquity – if an applicant can prove they are able to afford repayments, they should be trusted with the mortgage.

Yesterday Abbey mortgages announced that it was increasing the LTV on all of its fixed rate mortgages from 60 per cent, to 70 per cent.

This is a good example of a bank trying to help its customers – others should follow their lead. Whilst 70 per cent is still high, it will reduce the thousands of pounds required upfront for a deposit, and as house prices have dropped it will open more doors for those looking to remortgage if they have lost equity in their property.

But with a mojority of firt time buyers looking for a 90% deal lets hope things get better.