First-time buyers missing out on home purchase by not having enough for a deposit

 
First-time buyers missing out on home purchase by not having enough for a deposit [Photo: Courtney Keating via iStock]

Over a third of potential first-time buyers are still missing out on getting themselves a foot on the property ladder because they are coming to the market with a deposit that is too small for the home they want to purchase. 

According to findings published by Nottingham Building Society, as many as 35 per cent of would-be owners have been told that the money they have stored away to buy a home is not enough to get themselves on the ladder, despite the fact nearly half of these had saved more than ten per cent of the property's value.

The research states that of those who were trying to buy a home for the first time, some 18 per cent had managed to save but still had less than ten per cent of the value of the home for their deposit, while a further 17 per cent had managed to save between ten and 20 per cent. 

It was also found that while deposits are now commonplace when it comes to buying a home, there are still those in the market who would be happy to get themselves a place without having had to save first. 

According to the data, as many as ten per cent said they would be comfortable with borrowing 100 per cent of the value of a home they were buying if it meant managing to get themselves onto the property ladder for the first time. 

Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, said current trends have to be viewed as somewhat worrying for anyone looking to get themselves onto the property ladder for the first time. 

"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 ten per cent 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," he said.