The UK’s biggest building society has tripled the minimum deposit on house purchases for first-time buyers.
Nationwide has increased the minimum they will have to stump up from 5% to 15%, reports the BBC.
It said the change, starting today, was due to “these unprecedented times and an uncertain mortgage market”.
According to Nationwide’s price index, the average UK house now costs £218,902, meaning a new buyer will need a minimum deposit of at least £32,835 compared with £10,945 before, says The Guardian.
Banks and building societies are concerned that rising unemployment resulting from the coronavirus pandemic could cause house prices to fall, trapping some people in homes worth less than their mortgage, says The Independent.
Henry Jordan, the director of mortgages at Nationwide, said that “as a responsible lender, Nationwide needs to ensure borrowers can afford mortgage payments and are, as much as possible, protected against the potential for negative equity, should house prices decrease.
“Our priority at this time must be to help members keep their homes.”
House prices fell in March, April and May, according to Halifax, though they are 2.6% higher than the same time last year.
“Looking ahead, we expect market activity to increase progressively as restrictions are eased further across the whole of the UK,” says Halifax’s managing director, Russell Galley.
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