Smaller deposits raise hopes for UK first time homebuyers

Easier access to mortgages with a small deposit has offered some glimmers of hope for first-time buyers struggling to get on to Britain’s housing ladder, according to a new report.

Research on the amount of time it takes to save for a down payment on a home suggests buyers have been helped by the greater availability of mortgage loans at higher loan-to-value (LTV) ratios.

The estate agent Hamptons International said that in the final months of 2016 it would take an average single first-time buyer 11 years and nine months to save a 15% deposit. But reducing the deposit to 10% cut the saving time to eight years and three months. For a deposit of just 5% the time to save was four years.

Hamptons highlighted Bank of England figures that suggest such deals with smaller deposits have become more widespread in recent years. The proportion of loans made at a 90% or more LTV ratio was 5% in 2016, up from 3.8% in 2015.