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First-time buyers struggling to raise capital

Despite the fact that the headlines in the mortgage industry would indicate a general reduction in mortgage rates, it seems as though more and more first-time buyers are effectively being barred from the market. Over the last few weeks we have seen some eye-catching mortgage deals but upon further investigation they require deposits which can sometimes be as much as 40% of the property value. In this instance, there is no way that first-time buyers can participate and they are effectively being penalised if not barred from the industry altogether.

As we all know, first-time buyers are the lifeblood of the UK property sector as they allow previous first-time buyers to climb the property ladder. If first-time buyers do not return to the market in the short to medium term then we could see problems in the property chain which may well stop property owners from moving for the foreseeable future.

Prior to the recession first-time buyers were much sought after by those in the mortgage sector as they generally offered the highest profit margins and were most eager to get their foot on the property ladder. However, since the liquidity crisis in the money markets more and more mortgage companies are looking for greater and greater security to protect their balance sheets.

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