Woolwich, the mortgage arm owned by Barclays Bank, has become the latest lender to demand a 10 per cent deposit from all new borrowers.

Last week, Nationwide imposed a minimum 10 per cent deposit on all but two of its mortgage deals. Co-operative Bank, Cheltenham & Gloucester, Alliance & Leicester and Britannia Building Society have also introduced the measure.

Lenders are continuing to demand larger deposits from first-time buyers despite the recent £50 billion scheme by the Bank of England to help ease liquidity in the wholesale funding market and re-introduce cheaper lending rates between banks which will be hopefully passed on to borrowers.

Mortgages worth 125 per cent of a property's value were available until earlier this year. However, even deals which require a 5 per cent deposit are becoming harder to find. Deposits of 10 or even 15 per cent may soon become standard, according to some experts.

David Hollingworth at London & Country, the mortgage broker, said: “Like many other lenders, Woolwich has now withdrawn all 95 per cent LTV (loan to value) mortgage deals.

"There are still some 90 per cent LTV loans available, for example with Halifax and Abbey, but remember these are likely to incur hefty higher lending charges, which could run into thousands of pounds. The bigger the deposit you have, the better. This has always been the case but never more so than now."

Mr. Hollingworth added: “It is not all doom and gloom for first time buyers. As property prices look set to fall, many are hesitant about entering the market. The best thing they can do is wait and see how the market goes, and keep saving as much money towards a deposit as possible.”