Impatient buyers wait in limbo as banks take up LVR slack

In some cases they are forced to drum their fingers on the table for weeks or even a month or two, and watch the price of their home steadily rising as they wait for banks to be allowed to give them a loan.

The problem stems from a requirement that no more than 10% of total bank mortgage lending can have a deposit of less than 20%.

This is the result of the Reserve Banks' tight LVR policy which it has touted as a robust inflation fighting tool.

It mainly limits the ability of first home buyers to get a home, since they usually have small deposits, painfully built up by meticulous saving, all the while paying high rent for their flats.