Data shows banks squeezing out borrowers who can stump up only a 15% deposit for a home
Banks are squeezing out borrowers who can stump up only a 15 per cent deposit for a home, data shows.
The number of mortgage deals available to borrowers with a 15 per cent deposit has almost halved from 664 to 357 since March, according to analyst Moneyfacts.
Even deals requiring a deposit of 20 per cent have fallen by a fifth from 714 to 571. The crunch comes amid fears of a house price crash, which could limit the money banks can recoup if they need to repossess homes.
Feeling the squeeze: Lenders are reported to have struggled to deal with a flood of applications from first-time buyers
Nationwide Building Society has predicted house prices could fall by 14 per cent in 2020. TSB has become the first big lender to axe deals with a loan-to-value ratio of 85 per cent.
It has also started asking new customers on furlough to provide letters from employers confirming they will be brought back to work.
Most major banks will still lend to workers on furlough, but many are assessing lending on a case-by-case basis. Nationwide has said it would now require a minimum deposit of 15 per cent.
Lenders are reported to have struggled to deal with a flood of applications from first-time buyers. If buyers are unable to climb on to the housing ladder – or even move up with their next purchase – this could reduce demand and exacerbate any fall in prices.