View more on these topics

Labour wants to see rise in number of high LTV deals to boost market

The government says it is keen to see a rise in the number of 90% LTV products on the market.

The comment was made by Ian Pearson, under-secretary of state for business, enterprise and regulatory reform, at a recent House of Commons debate.

Pearson’s remarks were in response to a question from Gordon Banks, Labour MP for Ochil and South Perthshire.

Banks says: “Most products now demand large deposits of up to 30% but why? Could it be that lenders have individuals’ best interests at heart and want to ensure they can cope with their repayments? I don’t think so.

“I believe they are protecting their backs against a further fall in house values.”

He adds: “The solution is simple. We must return to widely available 90% LTV mortgages if we are to have any hope of saving the industry.”

Banks went on to ask Pearson why state-owned lender HBOS has only been lending at 80% LTV on new-build properties since the beginning of the year.

Pearson says: “The government has made it clear that it wants to see a mortgage market that functions well, where lenders lend responsibly and borrowers have access to a wide range of mortgages that they can afford to repay.

“I share the ambition to see more 90% LTV mortgages being offered.”

Pearson says there are 90% LTV mortgages available but the government should think about what else it could do to help first-time buyers get a foot on the housing ladder.

Meanwhile, figures released by Moneyfacts show two lenders are still offering 100% LTV mortgages.

Tipton & Coseley is offering 100% LTV deals but restricts lending to just four postcode areas in the West Midlands and a parent must act as guarantor.

Northern Bank, which only lends to borrowers in Northern Ireland, is also offering 100% LTV deals. Just three lenders are offering 95% LTV products – Abbey on a five-year fixed rate and National Australia Bank-owned Clydesdale Bank and Yorkshire Bank on first-timebuyer products.

The figures also show that more than two-thirds of the 1,485 mortgage deals on the market require deposits of at least 25%.

Overall, the number of mortgage products available as of April 6 had increased from 1,398 in March to 1,485. But the number of mortgages available at 90% LTV slipped slightly from 101 at the start of March to 93 on April 6. Meanwhile, 85% LTV deals rose from 237 to 258.


Mortgage lending increases slightly

The number of mortgages ticked up in February, shows the latest data from the Council of Mortgage Lenders. The number of house purchase loans reached 24,300 in February, compared with 23,400 loans in January – a 4% increase. Although the total mortgage lending in both January and February was the same at £3.1bn.But historically activity […]

HIP go-slow

Did you notice anything unusual last Monday? I thought not, although it was Home Information Pack Hooray Day.

Paradigm offers life insurance leads

Paradigm Mortgage Services, the mortgage partnership proposition, has linked with data management company, Triangle Direct, to offer its members access to ‘hot key’ life insurance leads.


News and expert analysis straight to your inbox

Sign up