First-time buyers struggling

First-time buyers in the UK property market are struggling as banks demand larger and larger deposits despite the fact we saw an increase in competition in the sector just a few weeks ago. The average deposit required to obtain a mortgage is now 25% which does not compare favourably to the average figure of 10% prior to the credit crunch and economic downturn. The Council of Mortgage Lenders also believes that 80% of first-time buyers under 30 years of age now require the financial assistance of their parents and the average age for unassisted first-time buyer is now 37 as opposed to 33 just five years ago.

There is no doubt that first-time buyers are struggling to obtain mortgage liquidity in these very difficult and very challenging times. However, in many ways the government has very little in the way of scope to criticise because it has been highly critical of UK banks for taking undue risks and with a property downturn forecast in the short to medium term can we really blame UK mortgage providers from stepping back from the edge?

At some point the relative value of UK property will find a level at which buyers will show more interest but at this moment in time the vast majority of potential buyers are happy to sit on the sidelines.