Tuesday, January 15, 2008
Deposits double from 5% to 10% (so affordability drops 50%)
Two of Britain's biggest mortgage lenders, Alliance & Leicester and Britannia building society, have doubled the minimum deposit demanded from first-time buyers in the latest sign that banks are anticipating a downturn in house prices. Borrowers will have to pay a minimum deposit of 10% on the price of a property compared with 5% before. A typical first-time buyer with a £7,500 deposit can now only afford a house worth £75,000, instead of one worth £150,000. Big lenders such as Halifax, Abbey and Nationwide to continue to offer 95% loans.