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95% LTV Mortgages Are Back


One of the consequences of the decision in the Budget by Chancellor Philip Hammond to axe Stamp Duty for First Time Buyers, (FTB’s) on the first £300,000, is that some lenders have decided to take advantage of this by relaunching into the 95% Loan To Value (LTV) product arena.

This is good news for the increasing number of First Time Buyers out there looking at taking advantage of the triple incentive of lower Stamp Duty, low rates and increasing numbers of high Loan-To-Value mortgages available.

Over the course of the year, FTB activity has been strengthening in any case, once more becoming an increasingly important part of the market. In fact, in the three months to October, FTB’s in London borrowed some £3.31 Billion, which was up 7% on the second quarter of the year and is now at the highest level since 2007 according to figures from UK Finance.

According to them, the average household income of a first-time buyer was £41,009 in the UK overall and £67,737 in London. In Wales and Scotland it was £33,904 and £33,608 respectively.  The typical income multiple for borrowers was 4.06 in London compared to 3.61 for the UK overall.

These latest Stamp Duty changes are sure to encourage even more to investigate the possibility of finally getting on to the Housing Ladder.

Barclays were the quickest off the mark with their offering, re-entering the market for FTB’s who only have a 5% deposit with some pretty decent rates with fee and fee-free options. Newcastle Building Society quickly followed suit and together with a handful of other lenders their is now a range of options at this level.

In the mortgage market generally, after the initial rush by lenders to increase rates, we have now seen some lenders cutting once more as Swap rates seem to have eased. Competitive rates are still in abundance and it still makes me gasp when I see 90% LTV products with rates below 2%.

It may just be a busy end to this year and strong start to the next.

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