10% deposit minimums to change the UK buying culture ongoing

Comment from Katie Tucker, Technical Manager, John Charcol: “Today Cheltenham and Gloucester and many other lenders are reducing their maximum LTV from 100% all the way down to 90%.

This year, the UK will see a return to the culture of saving for a deposit. More young people will stay at home for longer, and those paying rent will have a difficult time saving as well. It will have a knock-on effect for the whole economy as it takes spending money for those age groups, out of the retail system.

This marks a return to our parents' generation's philosophy of saving. Some parents may be able to gift deposits but more parents need to keep hold of their own equity to replace the pension funds they have been let down on. Such a constraint on availability of money to buyers can only re-adjust the property market back down in value.

Accord has removed its 95% mortgages and now lends 90% maximum Saffron: was 100% max, now 95% max. Royal Bank of Scotland: all their 100% LTV deals closed. The facility on the new One Account mortgages would be reduced from 99% to 95%.”