Cheap mortgages still require large deposits

Cheap mortgages will continue to be offered to borrowers with the most equity available to them, according to an industry expert.

Matt Griffith, spokesman at PricedOut, said that mortgage lenders are starting to take the needs of first time buyers seriously, however there is some way to go.

"Mortgage lenders are still rationing credit, and the best rates are still preserved for those with the most equity. This doesn't look like it is going to change in the short to medium-term," he explained.

He added that the industry needs to take steps to improve the situation and make cheap mortgages available to first-time buyers by taking their previous savings history into account.

It is unusual that this is not already happening as the government and financial firms are trying to encourage saving, Mr Griffith said.

The Council of Mortgage Lenders CML revealed this week that gross mortgage lending in July 2011 fell by one per cent to £12.6 billion compared to the previous month and by six per cent compared to July 2010.

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2011-08-19 13:41:26 © Moneyextra.com