Deposits hit 40-year high as 100,000 first-time buyers kept off property ladder

At least 100,000 first-time buyers who have no help from the ‘bank of mum and dad’ were unable to enter the housing market last year, as the number of low deposit mortgages slumped to a record low.

In 2009 there were only 28,000 loans to first-time buyers at 90 per cent or more - where buyers had to find a 10 per cent deposit or less - down from 245,000 in 2006. And numbers of younger first-time buyers able to buy a home without help with a deposit fell by 100,000 per year between 2006 and 2009.

The UK Housing Review published by the Chartered Institute of Housing (CIH) has been collating and analysing UK housing market data for nearly twenty years, tracking market trends over decades. The new edition, published on 21 January, highlights the jump in the size of deposit needed to get on the housing ladder. First-time buyers needed a 30 per cent deposit on average in 2009 in order to purchase a home, higher than at any time since 1970. According to co-author Professor Steve Wilcox this makes the collapse in the availability of low-deposit mortgages the largest single barrier to home ownership.

Richard Capie, CIH Deputy Chief Executive, said: “Deposits are now at a 40 year high and prospects for first time buyers look bleak. The deposit barrier has become a mountain that more and more potential home owners simply can’t climb without help from mum and dad.