HSBC is planning to increase the maximum LTV on new-build mortgages from 75% to 85% LTV in the next couple of months.
The lender believes valuations in the market have stabilised and it is now safe to raise its LTV.
Q1 was HSBC’s best ever quarter as it lent £4.9bn overall and £1.2bn to first-time buyers.
It has now lent a third of its annual target of £15bn, although it believes lending was higher in Q1 because of the Stamp Duty holiday and doesn’t believe it took more market share.
John Wakefield, manager at New Home Mortgage Services, says: “Raising LTVs is one way for lenders to support the new-build market but it would be better if it was higher than 85% as many borrowers struggle to raise a 15% deposit.”