The credit crunch to hit first time mortgage buyers

25/02/2008

The UK mortgage market is set for another major impact as a result of lenders increasing the initial deposit to secure a mortgage. 

With the ongoing talks of the UK credit crunch and the impact of it on the UK mortgage market first time buyers could see themselves as the first to be affected.

The latest mortgage news to hit the press today discusses a minimum 25 per cent deposit by borrowers to get their mortgage.  This new requirement was put in place by lender Nationwide and borrowers are warned that if this deposit is not met then they could be hit by a higher rate of mortgage interest.

Many first time buyers will now feel the pinch of the actions of lenders, especially as mortgage lenders have become more risk averse and are reducing their product portfolio by cutting down how much they will borrow against the property.

According to industry experts the market seems to be changing but remaining calm, lenders are spending more time looking at their product ranges and less time competing against each other.  The focus seems to moving towards ensuring higher margins are achieved.

The outlook for the mortgage market is more likely to see less aggressive product launches by lenders to attract customers