Figures published by the Bank of England this week showed that mortgage approvals were down nationwide from 66,000 in September to just 59,000 in October
First-time buyers have been urged to “batten down the hatches” and save up a deposit to use from spring onwards after data emerged showing plummeting mortgage approvals and growing pessimism over home ownership chances this winter.
Simon Bath, chief executive of property technology provider iPlace Global, said getting a foot on the property ladder had become increasingly difficult since September due to a combination of lender nervousness and squeezed budgets.
Figures published by the Bank of England this week showed that mortgage approvals were down nationwide from 66,000 in September to just 59,000 in October. Bath said the picture was even starker in London because of high property prices.
Meanwhile a poll commissioned by digital bank First Direct showed that nine in 10 prospective first-time buyers in London worry the cost-of-living crisis will impact their ability to purchase a home.
This group expects to be 36, on average, when they get hold of their inaugural set of keys. This compares to current homeowners in the capital, who typically purchased their first property in their 20s.
Bath told Homes & Property the market had almost ground to a halt in the capital as lenders tightened the screw on affordability criteria for mortgages and house hunters struggled to find the equity to keep up.
The multiples of income that lenders are willing to offer have decreased substantially from just four months ago, he said. Coupled with that, the Bank of Mum and Dad, which has propped up the first-time buyer market in London, has dried up alongside inflation and cost-of-living concerns.
It is time to batten down the hatches and save money for a deposit so you can be in a better position in the spring, he said.
The average house price in London stands at £682,000, according to data published in November. With some lenders now asking for 20 per cent deposits, according to Bath, this now requires a property hunter to find more than £135,000 to put down as a deposit on a typical London home.
