More than one in three buyers have seen their offer on a first home fall through because their deposit was too small to secure a mortgage, according to new research by Nottingham Building Society.
While first-time buyers borrowed a record £53.2 billion last year, according to the Council of Mortgage Lenders, the building society found that 35% of potential first-time buyers missed out on deals – even though around half have saved up a deposit of more than 10%.
More than half (51%) of those polled say they have a deposit saved before looking to buy, with around 18% having a deposit of less than 10% and 17% having between 10% and 20% of the purchase price.
The research also shows that 42% of first-time buyers would be comfortable borrowing 15% or more of the purchase price of their first home, while around 10% would be willing to borrow 100% of the price.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services (part of The Nottingham), says: “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.”