House purchase ‘should be delayed’

First-time buyers have been advised to delay making a purchase until banks begin offering mortgage deals requiring smaller deposits.

Paul Holmes, chief executive of Firstrung, explained that timing is crucial and the return of mortgages with high loan-values could be an indication that a recovery is taking place.

He noted that lenders have access to the best market intelligence and they are asking for deposits of up to 40 per cent because they expect prices to fall and wish to protect themselves.

“When they start offering mortgages with ten per cent deposits, freely available, that will tell a first-time buyer that the market has bottomed out,” said Mr Holmes.

His comments come after property website Rightmove.co.uk revealed that 69 per cent of potential homeowners think now is a good time to make a purchase.

But Mr Holmes warned that buying while 30 or 40 per cent deposits are required is “crazy”.

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