In a breakdown of individual tiers, there were 16 more products in the 85% LTV tier – 11 fixed and five variable, 15 in the 90% LTV tier -nine fixed and six variable – and five in the 95% LTV tier, all of which were fixed rate products.
Moneyfacts says it suggests 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.
However, it appears that building societies are leading the way at offering products targeted at those with smaller deposits, with 10 of the 15 providers which launched 90% plus LTV products being building societies.
Moneyfacts.co.uk’s finance expert Sylvia Waycott says: “Increasing LTVs will create a knock-on effect in the whole housing market. Not only will it aid the stagnation of the first-time buyer market, but also the second movers market because they need first-time buyers 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.”