First-time-buyers with small deposits have been hit hardest by the result of the EU referendum, as the number of mortgages for buyers with 5pc deposits has shrunk.
The average price of a first-time house reached a 2016 high in June, of £161,912, but the number of mortgages available to those with the smallest deposits has fallen since June - the only type of mortgage to decrease in number.
This reflects lenders' growing concern that the housing market could falter in the wake of the EU referendum, brokers say.
High loan-to-value mortgages (where the loan represents a high proportion of the price paid) are risky, as they expose the lender and property owner to potential negative equity if prices fall.
With negative equity the outstanding mortgage becomes greater than the value of the property.
The number of mortgages available to buyers with larger deposit amounts has increased since June.
In August five first-time-buyer mortgages were removed from the market by lenders, reducing the number available from 243 to 238.
Meanwhile 10 new mortgages for borrowers with 20pc deposits have been introduced.
Data from comparison service Moneyfacts and mortgage insurer AmTrust also suggests that lending to buyers with small deposits has been falling over time, despite the introduction of schemes such as Help to Buy.
Lending to first-time-buyers has been falling steadily since it peaked in the second quarter of 2014. Loans to buyers with 5pc deposits now make up just 2.5pc of lending - down from 4.2pc of lending in the second quarter of 2014.
Experts said the fall was down to lenders' caution amid a lower appetite for risk. There is concern that an unwillingness to lend to buyers with small deposits might be limiting young people's ability to get onto the property ladder.
Simon Crone, commercial director at AmTrust, said: "This will exacerbate fears that homeownership levels are in long-term decline because of the challenges first time buyers face in accessing the market.
"Failure to support first time buyers will impact the wider housing market by preventing people from moving up the housing ladder."
For those who can get enough together to buy a property, rates are lower than ever, with three lenders cutting the interest rates on their first-time-buyer mortgages last week.
Aldermore cut the rate on its Help to Buy mortgage from 6.09pc to 4.98pc, and Virgin Money cut its five-year Help to Buy fixed rate to 4.39pc. Nationwide also launched a two-year tracker mortgage for first and second time buyers at 3.59pc.
Calculator: when will you be able to afford a house?
Calculator Guide
- House price today: Pick your desired location for an average house price, or you can enter any value you please up to £999,999.
- Desired deposit: What percentage of the house price you want or need to save - remember this can be as little as 5pc with Help to Buy.
- Annual savings: The average you think you can save per year - if you're not saving much but will be, then put an overall expected average.
- Total start amount: How much money you have already got saved.
- Total assistance available: How much you will be given towards a house by family or other sources. Don't include Help to Buy here; to factor that in, drop the deposit amount instead.
- Annual house price inflation: How much house prices will go up per year. The Office for Budget Responsibility average for the next five years is around 5pc, which is the default here, but change it as you please.
- Attitude to risk: This is how willing you are to take risk with your money through investing. The low figure would be if you were sticking to Isas and savings accounts with little to no investment. Medium would involve investing in some stocks, funds or other risk taking options, but steering clear of anything too risky. High would involve taking a significant amount of risk with your money, but with greater potential returns.
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