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Nationwide bumps up mortgage deposits

25/02/2008

Homebuyers in the London area will need to raise a minimum deposit of £75,000 or end up paying a higher mortgage.

Nationwide increased its deposits on all new mortgage deals simply to keep the best interest rates. It has increased from 10 per cent of the property value to 25 per cent. This has caused major problems for first-time buyers in particular.

A Nationwide spokeswoman commented: 'our costs of funding are higher and, like all lenders, we have to adapt to changes in the market place. We're not seeing anybody going after market share. Instead, they are increasing margins.'

Rightmove the property database online website said that house prices dropped for a fifth successive month during February. The average price of a property in the UK slid to 0.2 per cent to £174,400.

From Hometrack, Richard Donnell explained further: 'A small but growing number of buyers appear ready to dip their toes in the market again, but any upward pressure on prices is likely to remain limited for the foreseeable future.'


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