Number of high loan-to-value mortgages at new high

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The Moneyfacts UK Mortgages Trends Treasury Report, published in November 2016, reveals that a total of 594 90% loan-to-value mortgages are available from lenders, representing the largest number for eight years. There are also 250 95% loan to value mortgages available.

This is good news for first-time home buyers who can now purchase a home with a 10% or 5% deposit.

The government’s Help to Buy scheme was designed to help first-time buyers by guaranteeing the mortgage and helping buyers afford deposits. This scheme is ending, but this may not affect the number of first-time buyers. The abundance of low-deposit mortgages means that first-time buyers will still be able to get onto the housing ladder.

There was financial uncertainty following the Brexit vote and the Bank of England encouraged mortgage lenders to continue their usual practices. In the immediate aftermath of the vote, high loan-to-value mortgage offers dropped. The Mortgage Trends report confirms that the number of these mortgages has now increased and is above the levels seen before the referendum.

Charlotte Nelson, Moneyfacts’ financial expert, said:

“The Help to Buy Mortgage Guarantee Scheme made it acceptable to lend at the higher loan-to-values again after the financial crisis. It’s hoped that the removal of this crutch won’t cause this fundamental part of a healthy mortgage market to collapse.

“After the initial shock to markets following the vote on 23 June it appears that the higher loan-to-value market is doing even better than usual.”

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