First-time buyers and house movers are tentatively venturing back into branches due to a combination of two factors – consumers needing to move to take account of changes in family circumstances and more importantly, a recognition that prices are now more realistic.
For borrowers requiring sub-75% LTV loans, lenders have competitively-priced products.
For first-time buyers, prices are still significantly higher and regardless of what happens to the Bank of England base rate, these are unlikely to change significantly.
The problem is the lack of products in the high LTV sector, particularly in the intermediary channel.
This is understandable given the prevailing concern about asset prices as well as the capital requirements lenders are required to meet in this sector.
So the housing market needs the reintroduction of products at or around 90% LTV as this would encourage buyers back. It would also be likely to establish a floor for house prices which in turn should encourage more transactions and ultimately lead to a rise in prices.
The market needs further intervention and this could come in the form of a government-backed guarantee to insure the top slice of any lending.