Banks are damaging recovery in the housing market, according to Britain’s biggest property development company.
Barratt Developments believe lenders are making it impossible for people to buy new homes by demanding 20% deposits. Consequently, those buying an average priced property must find a down payment of around £35,000.
Unless prospective buyers can turn to generous parents, they won’t be able to afford to get on the property ladder, Barratt said.
It also dismissed suggestions that buyers are simply too cautious to splash out on new homes, highlighting the fact that Britain is building fewer houses than at any time since the 1920s.
And with banks even more reluctant to approve mortgages on apartments, Barratt is trying to tackle the problem with a new range of small houses dubbed its ‘Aspirations’ range.
And with banks even more reluctant to approve mortgages on apartments, Barratt is trying to tackle the problem with a new range of small houses dubbed its ‘Aspirations’ range.
These houses are more expensive than the flats first-time buyers may previously have chosen, but demand smaller deposits from lenders. The other main benefit to young families is that they will not outgrow them as quickly and should delay the increased cost of moving to a bigger place.
Barratt recently announced it had slashed its losses to £163million in the 12 months to July from £679m the previous year.
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