A first home buyer has lost a $41,000 deposit on a St Kilda apartment after the National Australia Bank walked away from the loan at the last minute arguing the property was too small.

In a further sign that banks are tightening lending standards to high-risk segments of the property market, 20-year-old Alexander Tashevski-Beckwith said he was left without the deposit he paid and is on the hook for further tens of thousands of dollars in vendor fees after the bank reneged on the loan a day before settlement.

"They haven't even left me with time to renegotiate another loan," he said.

"I'm in this terrible financial position right now."