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The Mortgage market is shrinking faster than ever as deals for people offering a 10% deposit have almost evaporated from the market.

The BBC says there are only 66 deals of this kind are still on the market, compared with 586 three months ago and 1,197 in February. The figures, from Moneyfacts, have finally shown that this year’s credit crunch has almost killed off traditional deals for those without large savings.

This is bad news for first-time buyers, who do not have the advantage of equity from a current home. Entering into the housing market is becoming harder than ever as lenders need 15% or even 20% for a mortgage – which could be many thousands of pounds, without even considering fees, levies and taxes that go with buying a home.

Its also bad news for those who have arrears and debts – where once people could be confident that their rising house price could sustain their consolidations, now mortgages need collateral. The days of the two-year merry-go-round are unfortunately over.

But worryingly, the Bank of England says that there are half a million people who are in negative equity in the UK. That means many people could be stuck in their existing homes for the foreseeable future.

To keep up with the latest news and comments on the mortgage market please visit the Mortgage Broker Blog.