Whilst mortgage borrowers suffer, savers are continuing to profit from the credit crunch, according to price comparison site MoneyExpert.com...

The site recently revealed that Interest on savings accounts had risen an average 1.2 percent since January last year, despite the Bank of England base rate being the same as it was then.

Lenders have been pulling cheap deals, cutting the maximum percentage of a property's value they are prepared to lend and refusing more mortgage applications as they perceive greater risk among borrowers.

A third of lenders have reduced the maximum loan-to-value (LTV) they are willing to offer in the past year, hitting first-time buyers the hardest, according to financial data Web site Moneyfacts.co.uk.

Lenders much more cautious

Moneyfacts Mortgage analyst Julia Harris commented: "Whereas a year ago mortgages at 95 percent LTV were the most competitive, lenders are taking a much more cautious attitude to risk; now you are most likely to find better deals with a larger deposit, say at 75 percent LTV. In reducing LTVs, mortgage lenders are making first-time buyers look at getting a mortgage in a different light.

"Before, a prospective first-time buyer would be mainly concerned with how much money they could borrow on their income; now it will be where the deposit is going to come from. For those without help from parents it is an almost impossible situation."

MoneyExpert.com.Chief executive Sean Gardner said: The credit crunch has produced plenty of losers, but there are some winners too. Average rates on savings have rocketed as finance firms try to raise cash after the money markets seized up.

"Banks have shifted their prices considerably over that period: some products bear no resemblance to those on the market at the beginning of last year even, though the cost of borrowing is essentially the same."