More than half of all mortgage brokers have been unable to arrange a mortgage for a first-time buyer, according to the Intermediary Mortgage Lenders' Association (IMLA).
IMLA's survey found 56% of brokers were unable to source a deal for FTB clients because the most suitable products were not available to intermediaries.
The study, which covered the final three months of 2008, found 58% of first-time buyers had been unable to get a mortgage through their broker. Of those unable to obtain a mortgage, eight out of ten opted to rent instead.
Peter Williams, executive director of IMLA, says: "The first-time buyer end of the market has been hit extremely hard by lenders tightening their LTVs.
"For youngsters without a substantial deposit, the only alternative is renting. The private rented sector is going to have to pick up the slack."
However, Williams highlighted the buy-to-let market is also contracting sharply - a concerning development.
"Currently, intermediary lenders who traditionally serve the buy-to-let market are being frozen out by the Government - without support helping them to free up cash to lend, the buy-to-let market will suffer further retrenchment," he adds.
"This is a vital component of the UK housing market and the Government is currently ignoring its need."Mortgage Solutions
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