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First Time Buyers' Deposit Block

Sat 29 Jul 2017

The latest research from the Nottingham Building Society has shown that over 1 in 3 first-time buyers have missed out on purchasing a property, as their deposit was too small, despite having OVER a 10% deposit!

According to the figures, 35% of would-be first-time buyers saw house deals fall through in the past year because their deposit was too small to secure a mortgage. Around 18% say they had a deposit of less than 10% while 17% had less than 20% of the house price they were planning to buy.

Council of Mortgage Lenders figures show total borrowing by first-time buyers hit a record of £53.2 billion last year with more than 338,900 loans completed with an average loan-to-value is currently around 84.3% on loans of £132,400.

However, The Nottingham’s research found first-time buyers are still struggling to buy the homes they want despite having saved deposits. 

More than half (51%) of first-time buyers say they have a deposit saved before looking to buy.


Ian Gibbons, Senior Mortgage Broking Manager at Nottingham Mortgage Services (part of The Nottingham), said: 

“Borrowers with small deposits have a wide choice of loans to pick from but clearly many are struggling to buy the houses they want with so many potential deals falling through.

It is particularly worrying that borrowers with a 10% deposit or more are struggling. 

They should be able to secure a mortgage and not have to miss out on house purchases simply because their deposit is too small.

The withdrawal of the Help-to-Buy mortgage guarantee scheme will have some impact but in general the advice is always to search the market and get specialist advice on the range of options available.”

As an Estate Agent, I see all different kinds of properties. Typically, the properties that many first-time buyers will look to buy are affordable properties that will generate alot of popular interest. This interest will also mean many different types of buyers... Cash investors, or investors with a large deposit, middle aged families with a hefty cash lump some from a house sale etc etc...

In this case it can be seen that FTB with a 10% are not in as stong a position as the rest, and the vendor will tend to go with one of the other offers, which makes it very difficult for you to compete as a FTB.

However, there are ways to stand yourself in good stead! Please see our "How To Make A Good Offer On A Property... And Be Successful" article in the "Blogs" tab on our website for the best advice on this...

"Firstly can I say how grateful we are to all the team at Ferndown Estates for finding our perfect property. We have a lot of work to do but we have already settled in lovely at Marston Croft where the residents are all friendly and very welcoming. The area actually a lot quieter than we imagined being so close to the railway and airport but it really doesn't bother us at all. "
M Faulkner-Green. April 2017