Government Help
Number of first-time buyer deals drops
There are fewer deal available at higher loan-to-values now than there were before the government intervened.
The number of higher loan-to-value (LTV) deals on offer to first-time buyers has fallen since the Funding for Lending scheme was introduced by the government a year ago, Moneyfacts research has revealed.
In July 2012, first-time buyers looking for a 95% loan-to-value mortgage could choose from 62 products. Today, there are just 54. The number of products in the 90% LTV bracket increased by a third, to represent 12.4% of the market today.
Moneyfacts editor Sylvia Waycot said: “When you cut through the hype of the government initiatives such as the Funding for Lending Scheme, NewBuy, FirstBuy and Help to Buy; a general increase in mortgages on the market; lowering of interest rates; and some fantastic marketing, little has actually changed for anyone looking for their first mortgage and in some cases, it has worsened.
“It might have all been very different had Funding for Lending been specific in ensuring lenders lent higher LTVs, but, as the main provison is that they simply increase their lending books, we are unlikely to see much change from the conservative lending model and one opportunity to make a difference to this important market is lost.”
The number of mortgages with an LTV of 80% or 85% also rose by 27%, to represent nearly two-fifths of the market. However, low LTV products still accounted for nearly half of those available. In total, there were 2,872 products on the market, compared to 2,333 in July 2012.
Figures published this week by the Bank of England and the Council of Mortgage Lenders have indicated first-time buyer lending is lagging, as lenders pursue remortgages and niche areas such as buy-to-let.