Over-priced mortgages leading to stagnant market
Financial advice company MoneyFacts has released figures that show how first-time buyers are being put off getting on the property ladder.
With rates as high as seven times the base rate, there is little incentive for first-time buyers to change from renting to buying and therefore little hope that the dire state of the housing market will be rectified any time soon.
MoneyFacts analyst Michelle Slade explained that much of buyers trepidation comes from the fear of negative equity.
"The risk of customers buying a property and falling straight into negative equity is much higher than a year and a half ago," she said.
"Even as much as a year ago, asking a first-time buyer to commit to a 40 per cent deposit was virtually unheard of. Now its more the norm."
Homeowners are being forced to abandon plans to move to larger properties as they struggle to get a fair price and buyers for their own house.
However, those looking to expand their living space can still do so with a lean-to conservatory which will not only add space and style to the home, it will also add value.
MoneyFacts is the UKs leading independent provider of personal finance information.