House prices have fallen, but first time buyers are still being squeezed.
As lending conditions tighten and mortgage providers demand bigger deposits, first time buyers are turning to their parents to help them raise the money they need. According to the Council of Mortgage Lenders (CML), almost half of all first time buyers under the age of 30 now receive financial help from relatives to get on the property ladder.
This is up from the 38 percent who were offered such assistance in 2006 and demonstrates the difficulties first time buyers are facing when trying to secure a mortgage, despite large falls in house prices over the last 12 months.
"In the current market environment, 100 percent mortgages are not so widely available," said the CML. "Many lenders typically require a higher deposit from borrowers than before. So even though the total needed to buy a house is declining, first-time buyers are facing a new affordability challenge in the shape of a higher deposit required by lenders."
The figures show that the average first time buyer receiving financial assistance from their parents put down a deposit of £35,000 during the second quarter of the year. In London, where property prices are higher in spite of recent declines, this rose to £67,000.
Nationwide's latest house price index shows that property values fell at their fastest annual rate on record last month. The price of an average UK home is now £158,872.
