The choice of mortgages for people in the UK with a 10% deposit has shrunk by almost a quarter in six months, while the number of deals for borrowers with a 5% deposit has nearly halved, new research has found.
Comparison website MoneySupermaket highlighted the struggle faced by first-time buyers and those with smaller deposits to find a mortgage, despite the recent launch of a scheme to encourage lending.
The selection of products aimed at first-time buyers has plummeted by almost a third over the last year, from 1,786 12 months ago to 1,225, the website found.
The Bank of England and the Treasury fired an £80 billion "funding for lending" scheme into action at the start of this month to boost lending to households and businesses, but MoneySupermarket said there is little to show the initiative is doing much to help mortgage borrowers with smaller deposits.
Clare Francis, a mortgage expert at MoneySupermarket, said: "Despite the launch of the funding for lending scheme which was designed to encourage further mortgage lending by the banks, there appear to be few signs that the initiative is helping those with small deposits."