Mortgages available for less than £9,000 deposit

Data from the Mortgage Advice Bureau, sourced from its mortgage index, showed buyers using the government’s Help-to-Buy scheme were able to get a mortgage with an average deposit of just £8,974.

This was a 3 per cent decrease since August - when the average Help-to-Buy deposit was £9,229 - and significantly lower than September’s purchase market average of £67,929.

According to the research, the average person using Help-to-Buy was buying a lower-value home of around £150,488 compared to £226,641 for the wider market.

This was the lowest price in four months and a 6 per cent decrease since August.

As a result, they also borrowed less. The average Help-to-Buy loan was £141,514 in September, 6 per cent below August’s figure of £150,298 and almost £20,000 less than the typical house purchase loan in the wider market.

The research said: “The Help-to-Buy mortgage guarantee scheme continues to fill a void in the market in terms of affordability, offering a realistic way into the property market for buyers who are unable to save a large deposit.

“The generosity of the 95 per cent loan-to-value associated with the scheme is clearly not being abused: lower earners are using the scheme to purchase lower-priced properties and are taking on much smaller levels of debt as a result.

“Our data shows that even those aspiring owners who haven’t begun the task of saving until now can still feasibly become homeowners through the scheme in a relatively short space of time, while sharing the deposit with a partner or friend could reduce this period of saving to under a year.”

Adviser view

Amanda Parsons, of Hampshire-based AAP Financial Solutions, said: “I have been a broker for a number of years and Help-to-Buy hasn’t affected my business one jot.

“I get a lot of first-time buyers, but I have only had about two Help-to-Buy clients.

“They are just loan-to-value products and as long as it is affordable I don’t think the high LTV is an issue.”