Deposits shrink as mortgages expand again

HOME buyers are paying the smallest deposits for five years thanks to the return of high loan to value mortgages, research released today suggests.

The average mortgage’s loan to value was 71.8 per cent in March, up from 70.7 per cent a year ago, and the highest ratio recorded since records began in March 2009.

The figures from the independent mortgage broker Mortgage Advice Bureau (MAB) show that despite average house prices rising seven per cent year-onyear, average deposits have grown by just three per cent over the same period.

According to MAB’s National Mortgage Index, the average house deposit fell by two per cent between February and March to £61,325, the lowest figure recorded in the last twelve months.

MAB credits the wider availability of high loan to value mortgages for the difference.

“Providing consumers can satisfy the new mortgage affordability checks, this trend should continue to boost access to the property ladder and ease the financial strain of buying a home,” said Brian Murphy, head of lending at MAB.