Mortgage lenders ease loan restrictions

The proportion of mortgage deals needing more than a 25% deposit has fallen to a two-year low.

According to Moneyfacts, only 46% of mortgages currently on offer now ask for a deposit of that size.

The figures indicate some lenders may be relaxing their strict mortgage rationing of the past two years, the BBC reports.

However, lenders have warned they still face severe restrictions on their ability to lend to home buyers.

Michelle Slade of Moneyfacts pointed out the size of a deposit is also no longer the only method which lenders use to allocate mortgage funds.

"The availability of mortgages continues to improve and encouragingly it is borrowers with a smaller deposit that are seeing the biggest increase in numbers," she said.

"However, just because lenders have increased the number of deals available, it doesn't mean that more mortgages are being approved."

Meanwhile, separate research from Lloyds bank suggests falling house prices will continue to choke activity in the market, according to the BBC.

The bank says nearly a fifth of first-time owners did not have enough equity in their properties to move.

Research among its own mortgage customers by Lloyds, which owns Halifax, found 9% of so-called "second steppers" - those who want to sell their first home and move up the property ladder - are unable to do so because house prices have fallen since they first bought.