First-time buyers in mortgage crunch

First-time buyers are facing a mortgage crunch as Britain’s biggest banks axe low deposit loans. The top lenders have axed loans for deposits of 10% or less for the first time ever. They took this step after receiving uncountable applications from wealthy families attempting to take advantage of the stamp duty holiday.

Actually, wealthier people are aiming to upgrade to a larger home in the country. They are hoping to save up to £15,000 on stamp duty after the chancellor’s cut. This led first-time buyers in mortgage crunch.

According to the financial information firm Moneyfacts, there were 1,172 mortgages with deposits of 10% or less last September comparing with 76 now.

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Chancellor Rishi Sunak announced stamp duty holiday in a bid to boost a housing market. Thus, the measure could save the average homebuyer of over £2,000. He announced that stamp duty will be cancelled on all property purchases up to half a million pounds. Sunak hopes that this will provide the much-needed kick start that the property market in England needs. However, it is predicted that house prices would tumble and cause market stagnation this year.

Consequently, wealthier families took the advantage of stamp duty holiday and inundated lenders with loan applications. Hence, Lloyds which includes Halifax, Barclays, Santander, NatWest, HSBC and TSB have all axed loans for borrowers with a deposit of 10% or less.

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