Mortgage lenders in the UK continue to demand high down payment, making it difficult for homebuyers to secure mortgages to purchase homes. About 58 percent of mortgage deals offered today need a minimum down payment of 25 percent, while only 8 percent require a minimum deposit of 10 percent of the value of the home.
Starting next year, lenders in the UK will have to repay the government for the money it lent through the emergency support scheme. Due to this, mortgage lending is likely to be rationed.
The UK government is trying to get the housing market moving again. Recently, it announced the abolishment of the one percent stamp duty band for first-time homebuyers for two years. This means that homebuyers can purchase a home with a value of approximately £250,000 without paying property tax.
However, many lenders are still requiring first-time homebuyers to put down high down payment, at an average of 25 percent of the value of the house they are purchasing.