The proportion of first-time buyers purchasing a property without financial assistance from a family member or friend has shrunk from 63 per cent to 36 per cent between the third quarters of 2007 and 2011.
Statistics from the Council of Mortgage Lenders show are marked decline in the proportion of unassisted borrowers between the fourth quarter of 2008 and the first quarter of 2009, where the proportion of unassisted FTBs fell from 44 per cent to 37 per cent, highlighting the difficulties FTBs are facing in raising a deposit. The figure has remained broadly similar since.
The proportion of unassisted FTBs under 30 has fallen from 56 per cent in the third quarter of 2007 to 22 per cent at the end of Q3 2011.
In its fortnightly newsletter, News & Views, the CML says funding restraints and adverse market conditions led to a tightening of loan-to-value criteria.
The trade body also says that a combination of uncertainty in the economy, sluggish wage growth and continuing pressures on household budgets mean the “bank of mum and dad” will continue to be an important source for FTBs looking to raise a deposit.
Last month, the Government launched a mortgage indemnity scheme which will see it and house builders underwrite 5.5 per cent of the value of the lending on newly built properties.