Interest rate 'no consolation for first-time buyers'

The announcement made by the Bank of England yesterday (July 10th) regarding the interest rate is not likely to be beneficial to first-time buyers, one expert has said.

It was revealed by the Monetary Policy Committee that the official bank rate paid on commercial bank reserves would remain at five per cent.

However, Duncan Samuel, managing director of online conveyancing firm Convex.net, said that this would not necessarily help those struggling to get a mortgage in the current economic climate.

"Although asking prices are coming down, mortgage rates are at an eight-year high and most prospective buyers are being asked for deposits of at least ten per cent. Things are still very tough, particularly for first-time buyers," he remarked.

According to figures from the Council of Mortgage Lenders, the average first-time buyer put down a deposit of 13 per cent in April, which is the highest level in over three years.

First-time buyers typically took out loans for 3.3 times their income, down from 3.35 in March.

Earlier this month, mortgage advisory service Firstrung advised first-time buyers who cannot afford to purchase a house to "wait it out", saving as much as they can for a deposit in order to cut the repayments when they are able to approach a lender.