More high LTVs on offer in a bid to capture dwindling FTB market

BRIAN MURPHY, FIRST-TIME BUYERS PUT OFF
BRIAN MURPHY, FIRST-TIME BUYERS PUT OFF

Competition is starting to hot up in the high LTV market with lenders now offering almost 50% more deals than they were a year ago.

The latest figures from Money-facts.co.uk show there were only 144 90% LTV deals in February 2010, compared with 214 now.

Louise Holmes, a personal finance analyst at Moneyfacts, says: “Higher LTV mortgages are making a steady return to the mortgage market.

“Over recent months some lenders have increased their rates and expanded their number of higher loan-to-value deals, giving indicat-ions that the market could be returning to a competitive, rather than risk-based state.”

But Brian Murphy, head of lending at the Mortgage Advice Bureau, says while there are more high LTV products available lenders are not showing an increased appetite to lend at this level and are still pricing quite high.

He says: “Although this competition should enable more first-time buyers to enter the market, the rate differential between a product at 90% and one at 75% will put many first-time buyers off.

“Accessing the market at a more affordable level means first-time buyers are likely to remain reliant on parental contributions to afford to proceed.”

Several initiatives were launched last week to help first-time buyers get on the property ladder.

Taylor Wimpey is offering first-time buyers 95% LTV mortgages on some of its developments in East Anglia, East Midlands and East London.

The Take5 deal is being offered with Melton Mowbray Building Society and Saffron Building Society.

Leeds Building Society has a savings product for first-time buyers.

The account offers an interest rate of 1.50% and interest earned is doubled up to a maximum of £1,000 when the savings are used as deposit for a mortgage with the society.