High LTVs return to mortgage market - Mortgages - News - Moneyfacts


High LTVs return to mortgage market

High LTVs return to mortgage market

Category: Mortgages

Updated: 13/09/2012
First Published: 13/09/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

In August there was a surge of activity in the high loan-to-value (LTV) mortgage sector, with lenders launching more products aimed at those with smaller deposits, which should provide some much-needed relief for first-time buyers.

Moneyfacts.co.uk research reveals that last month 36 new mortgage deals in the 85% LTV tiers and above were launched, in a complete turnaround from the drop of 26 products the previous month.

In a breakdown of individual tiers, there were 16 more products in the 85% LTV tier (11 fixed and five variable), 15 more in the 90% LTV tier (nine fixed and six variable) and five more in the 95% LTV tier, all of which were fixed rate products.

This suggests that lenders are relaxing their attitudes to higher risk lending, perhaps in reaction to the Government's recently-launched Funding for Lending scheme, which aims to make £80 billion of cheap funding available to banks and building societies on condition that they lend more to small businesses and consumers in the hope that this will kick-start the economy.

Commenting on the figures, Sylvia Waycot, finance expert at Moneyfacts, said: "Attaining a deposit becomes more realistic if LTVs are raised and so after years of frustration potential FTBs must be doing jigs of joy in the street.

"Increasing LTVs will create a knock-on effect in the whole housing market. Not only will it aid the stagnation of the FTB market, but also the second movers market because they need FTBs to sell to. House buying as we all know is a chain and every link is essential; strengthen one link and the whole chain benefits."

What Next?

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.