uk lending still tight to first time buyers and low earners
News Posted On: 17 August 2011
A new report has found that despite record low interest rates and an increase in 90% mortgages, lending to first time buyers and those in the lower income brackets is still ridiculously tight, and in fact getting tighter.
Coventry building society has slashed rates on its five-year fixed-rate mortgages to less than 3.5% for the first time. Northern Rock has sliced 0.9% off some of its deals, while Nationwide, Skipton and Barclays have all taken the axe to interest rates. Meanwhile loan approvals for anyone on a low or middle income have fallen back sharply according to the report from e.surv.
The largest provider of residential valuation services in the UK e.surv found that lenders were more willing to grant loan approvals in the £750,000+ bracket.
"Approvals fell on all price brackets below £750,000, with lower income buyers in particular struggling to secure mortgage finance against a backdrop of tighter lending conditions," says the report.
Recent reports have indicated that loan-to-value limits have been easing, but this is not the case says e.surv. The firm found that first time buyers needed an average 33% deposit to get a mortgage in July, taking us back to levels seen in the darkest days of the credit crunch.
"Despite more high LTV products entering the market, lending criteria tightened most at the lowest end of the property ladder," e.surv said. The biggest squeeze on first-time buyers is in London, it added, where "wealthier buyers continue to represent a disproportionate share of the market."
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Written by Les Calvert
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