First-time buyers with deposits of five per cent are finding it difficult to obtain mortgage finance, according to new figures.

A report by Moneyextra.com suggested that those looking to get on the housing ladder would need at least a 30 per cent deposit to get the required funds.

Richard Mason, mortgage expert at the group, said that in a climate of falling house prices, this has created a "catch 22"situation for first-time buyers.

"The depressed market means there are bargains to be had but it's difficult to get on the ladder without a good deposit,"he observed.

Mr Mason added that lenders are generally being very "prudent", although he warned that without increased movement in the market, it is likely to become even more stagnant.

However, the Council of Mortgage Lenders recently found that the number of mortgage completions for house price purchases increased in February.

The 24,300 house purchase loans worth £3.1 billion were up four per cent on the 23,400 loans recorded one month before.

Written by Mark Garner
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