HSBC increases minimum deposit for flats to 15% or 20% for new-builds in latest blow for first-time buyers
FIRST-time buyers were dealt a further blow after HSBC hiked up their minimum deposit for flats.
The high-street bank has been one of the few who were still offering mortgages to buyers with a 10% deposit.
But from Monday, house hunters will need a minimum of a 15% or 20% deposit if they are purchasing a new-build.
This move will be a huge set back for many young people trying to get on the property ladder and cash in on the stamp duty holiday.
HSBC is not the only mortgage provider to tighten its lending criteria for first-time buyers.
Lloyds has also temporarily suspended it’s 100% mortgage scheme ‘Lend a Hand’.
According to Moneyfacts, those wanting to borrow 90% for a mortgage, there are only 48 deals on offer currently, compared to 758 a year ago.
And that’s not the only thing that has hit first-time buyers. Earlier this week, The Sun revealed that some buyers will not be able to use the Help-to-Buy scheme on new build homes in certain cities.
Property expert, Henry Pryor, told The Sun: “It doesn’t come as a surprise that lenders have taken a robust approach to the current financial climate.
"Whilst we have seen a lockdown bounce, this is expected to come to an end and lenders are preparing themselves for a reasonably bleak winter."
Last month Nationwide announced that buyers applying with a 10% deposit must prove that no more than a quarter of their funds was given to them by their parents.
HSBC blamed "business reasons" for putting restrictions on flats.
It claimed it will continue to support the housing market, including first-time buyers.
A HSBC spokesperson said: “We regularly review our products, rates and mortgage criteria to ensure we offer competitive mortgages and that we can provide a good service to brokers and customers who approach us directly."