For first time buyers looking for an IT contractor mortgage, raising the money for the deposit is the biggest hurdle they have to face. And the situation could get worse according to the Newcastle Building Society.

They suggested this week that first time buyers who cannot get funds from their parents will have to rent or stay with their parents for 10 years longer than middle class first timers. Not only do first time buyers have to find more in the way of a deposit, they now face more stringent credit checks.

Of course all of these new requirements are designed to reduce the risk of borrowers defaulting, which according to many played a bit part in the downfall of worldwide economies. The FSA has been forced into a situation whereby these strict measures are necessary but that will come as no comfort to first time buyers. UK house prices are already under pressure and the short term outlook for the housing market is not good.

It’s not only first time buyers who are struggling either. According to Spareroom.co.uk, thousands of buy to let landlords are having problems meeting their mortgage payments. The Bank of England’s decision to hold interest rates at 0.5% was welcomed by home owners, but this may just be a stay of execution.

41% of landlords admit that the rents they receive barely cover the mortgage repayments and over 22% say that if interest rates rise by 1%, the rents will no longer be enough to cover their mortgages. 10% of landlords are in an even worse situation, saying that a 0.5% rise will result in a shortfall.

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