According to recent report first time buyers looking to get a footing on the property ladder in the UK are continuing to suffer, even through house prices have been falling, and are now lower than they were this time last year. Whilst many first time buyers may have hoped that falling property prices would at last give them a chance to get onto the property ladder they have found a number of other obstacles in their way over recent months.

The global credit crunch has made things very difficult for all consumers, but has hit first time buyers particularly hard due to the changes that mortgage lenders have had to make to their lending practices and criteria in order to try and weather the effects of the credit crunch. Borrowing for fist time buyers has become more difficult and more expensive, which means that many first time buyers may still find that they cannot get their foot onto the first rung of the property ladder.

Over recent months lenders have withdrawn deals that used to be popular amongst first time buyers, such as 125% and 100% mortgages, and many are now demanding a higher deposit than the traditional 5%, which is very difficult for first time buyers with no savings. In addition interest rates and arrangement fees have rocketed, despite three recent base rate cuts.

One official said: ‘Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse. It means there is a generation of young people and young families being locked out of the housing market without a hope of ever sharing in the asset wealth of the generation before.’

Recent additions:

• Many lenders ignore base rate cuts
• Mortgage approvals slumped in March
• Credit crunch means slump in mortgage lending
• Could you be entitled to a break in monthly mortgage repayments?
• Nationwide asks for larger deposits from borrowers

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