Bye bye first-time buyers?

Following the withdrawal of Abbey from the 100 per cent LTV market yesterday, and a hike of up to 0.37 per cent on their fixed-rated deals as of tomorrow, all eyes will now be on the Bank of Ireland as the only mainstream bank still offering 100 per cent mortgages through its own lending arm and subsidiary Bristol & West.

Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "It won't be long before it too falls in line with its peers, after which time the first-time buyer could become somewhat of an endangered species. The majority of lenders will now only look at people with a deposit of at least 10 per cent, and even those types of deals are diminishing rapidly – in just over a month, the number of 90 per cent loan-to-value products has gone from 1,430 to 836. The liquidity crisis is squeezing across all products, not just the bigger LTV deals that are the traditional staple of first-time buyers."

Thirty-two per cent of moneysupermarket.com poll users say the mortgage crisis is affecting them, with the numbers pretty evenly split between those who have delayed their plans to buy or move, are worried they won't be able to remortgage, or don't know how they'll afford their repayments when their current deal ends.

Louise Cuming added: "The term 'credit crunch' has been bandied around the media for months, but it's only starting to hit home for Joe Public now. It's enough to send a chill down anyone's spine.

"The problem is two-fold – not only are there fewer mortgages available generally, but the chances of being accepted are also a lot slimmer.

"Twice as many mortgage applications to our broker team were declined in the past three months, compared to the first half of 2007.3 But if all lenders start to turn their backs on consumers, this will lead to greater economic calamity over the longer-term."