First-time Buyers

Jump in borrowers searching for small deposit deals

Samantha Cordon
Written By:
Samantha Cordon

More borrowers are looking for high loan-to-value mortgages as they look to secure larger loans on cheaper properties, research from the Mortgage Advice Bureau has shown.

In the 12 months to March product search data from Mortgage 27 revealed that 27% of people using the sourcing tool were looking for a mortgage above 90% LTV, an increase of 8% year-on-year.

At the opposite end of the scale borrowers searching for a mortgage up to 60% LTV has fallen back in the same time period from 33% to 23%.

MAB said this was due to more choice higher up the LTV curve.

While the Help to Buy scheme has opened up the 90% plus market, which peaked at 29% in Q4 2013 when the mortgage indemnity phase was launched, a bolder consumer appetite is driving up demand.

The trend over the last 12 months has been for consumers to seek slightly larger loans, averaging £142,375 compared to £139,990 a year ago, on cheaper properties, averaging £203,244, which is a drop of 5%.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The last 12 months have seen consumer faith restored in the mortgage market with thousands finding new hope of securing a deal.

“Government and lenders have clearly captured the mood and responded to a generational need by offering better options for buyers with relatively small deposits.”