First-time buyers in Oxfordshire will find it even harder to get on the property ladder after two banks announced they will now require bigger deposits from borrowers.

The Alliance & Leicester and NatWest are applying the rules in places where houses have soared in value in recent years.

So far, other lenders have not followed suit.

The Alliance & Leicester is applying the restriction to all homes in the south-east that cost more than £100,000, but NatWest has only introduced the rules within the M25 at this time.

Banks and building societies will usually lend up to 95 per cent of a property's value.

The Alliance & Leicester and NatWest have cut this to a maximum of 90 per cent in the areas they have classified as hotspots.

This means that a borrower wanting to buy a £250,000 property would have to find an extra £12,500 towards a deposit.

The move is likely to affect most homes in Oxfordshire, where the average house price is £180,000.

Areas in the county which have seen the biggest price rises in the past few years are north Oxford, Burford, Woodstock and south Oxfordshire.

Miles Collison, sales manager at Oxford estate agents Knight Frank, said the new ruling could affect some first-time buyers.

He added: "The first-time buyer market in Oxford has already been hit because of the high salary you would need to borrow about £200,000.

"Having to borrow a bigger deposit could have implications for some people, but I don't think this will cripple the market."

The banks want to reduce their risks because of fears that they could be left with bad debts if there is a downturn in the market.

John Callow, director of Connells estate agents, in Templars Square, Cowley, said: "The Cowley and Littlemore areas are where first-time buyers can afford to live in this city.

"They could start to feel penalised and that would be a worrying development, because then they might consider buying elsewhere."

Other areas affected by the decision include Brighton, Portsmouth, St Albans, and large parts of London.

Other lenders, apart from NatWest and Alliance & Leicester, are concerned that the introduction of the policy could drive down property values.

Property prices across the country soared by more than 15 per cent last year, but a number of areas saw even greater rises.

When the market crashed, following the property boom of the late 1980s, many borrowers were left with mortgages bigger than the value of their homes, and NatWest and Alliance & Leicester say they want to avoid a "negative equity" situation.

At Alliance & Leicester, the postcode policy is being applied to properties valued at £100,000 or more.

NatWest, which introduced the move at the beginning of this month, said people buying property in a quarter of all postcode areas in Greater London would be affected by the new policy.

But the bank added that it was taking each mortgage application on a case-by-case basis and it applied only to people looking for mortgages of more than 95 per cent the value of their homes.

Alliance & Leicester said it had been asking for a deposit of at least ten per cent of a property's value on homes worth more than £100,000 across London and the whole of the south-east since the autumn.

Spokesman Ginny Broad said the bank had decided on the move following strong gains in house prices across the whole south-east, and fears that the terrorist attacks of September 11 could destabilise the economy.

She said: "It's about responsible lending, making sure that when people take out a loan it is sustainable in the long-term."

Halifax, Britain's biggest mortgage lender, said it had no plans to introduce higher deposits on its lending and called on other mortgage lenders not to follow suit.

The UK's biggest building society Nationwide, HSBC, Barclays and the Woolwich also said they had no plans to call for higher deposits on mortgage lending in the near future.

For more news, check out our new Property site! You can find a link to it on the left.