First-time buyers benefit from falling deposits

FIRST time buyers have been given a boost after new figures showed that the availability of mortgages is on the rise.

The number of deals is up 20 per cent compared to the start of the year, according to financial information service Moneyfacts.

The increased has been driven by the thawing of the mortgage market with lenders reducing the level of deposit required for first-time buyers.

Mortgage providers have started to become more generous with their criteria since October, when 66 per cent of deals on offer required a deposit of at least 25 per cent.

Ten per cent terms are now back on the table.

Darren Cook, of Moneyfacts, said: "Better rates and an increase in appetite to lend could indicate that lenders are opening their doors just a little wider and trying to compete for business.

"If standard variable rates continue to rise, many customers will be forced to find a better deal elsewhere and lenders may now be wise and gearing towards the prospect."

Ray Boulger, of mortgage broker John Charcol, said: "It is a continuation of the trend we have seen for the last three or four months, none of the cuts have been massive, with lenders cutting a few selected rates rather than all of their rates.

"The reason for the trend is due to a bit more competition in the market. We will see a bit more activity in the market this year."