UK mortgage lenders are continuing to turn the screws on first-time buyers as the average deposit rose to a three-year high of 13 per cent and the number of new loans granted in April slumped by 36 per cent.

Overall gross mortgage lending in April rose by 8 per cent to £26.1 billion after two consecutive months of decline. However, according to The Council of Mortgage Lenders (CML), gross mortgage lending fell by 5 per cent compared with April last year.

Although the annual decline in April was less pronounced than the 24 per cent fall in mortgages measured in March compared with the same month in 2007, the CML expects the UK home loan market to soften further this year.

Michael Coogan, director general of the CML, said: "Monthly house purchase volumes continue to be lower than last year's levels and there will be a further weakening in coming months as recent approvals data has shown."

The average deposit paid by first-time buyers rose to 13 per cent in April - the highest level in over three years, according to the CML.

A number of UK banks have tightened up lending criteria in recent months following the US sub-prime mortgage crisis and the near collapse of Northern Rock. Yesterday, Times Online reported that Halifax is planning to introduce tracker mortgages requiring a 40 per cent deposit from borrowers.

In April, 18,500 loans were granted to first-time buyers, up 4 per cent on March but down 36 per cent on the same month last year. The market for existing home owners also slowed with total mortgage deals falling by 38 per cent on April last year, though compared with March 2008, there was a 13 per cent improvement.

The ratio that buyers can borrow against their salary has also tightened, from 3.35 times salary to 3.3 times.

At the same time, Britons are opting for more secure mortgages, with the proportion of buyers taking out fixed-rate deals rising from 54 per cent in March to 59 per cent in April.

The total number of first-time mortgages reached £7.7 billion in April while the remortgaging market totalled £11 billion and accounted for 42 per cent of gross mortgage lending in April.

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