'Borrowers will need larger deposits in 2008'
Financial institutions are more likely to insist on larger deposits from potential buyers this year, it has been claimed. According to the Royal Institution of Chartered Surveyors (Rics), the slowdown in the housing market is set to continue during the coming months. This, coupled with concerns over the credit crunch, will lead banks and building societies to tighten lending criteria, and insist on larger deposits from potential borrowers, Oliver Gilmartin, a senior economist at Rics, said. "A more sluggish mortgage and housing market is set to continue in the near term, as financial institutions remain on high alert as to lending exposures. "Even the few undeterred by market conditions will to need to find even larger deposits to take the first step on the property ladder," he explained. The shoring up of lending criteria is set to hit first time buyers, who are already struggling to raise deposits hardest. Mr Gilmartin's predictions come as data from the British Bankers Association showed that mortgage approvals during December hit an all time low.
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