We’ve been talking about high LTV (Loan to Value) mortgage news a lot – mainly because there has been so much of it. It is only recently that lenders have started offering mortgages for more than 85% property value after years of caution.
Following the expanded Help to Buy scheme, several lenders started offering new, high LTV mortgage products (up to 95%), with a particular emphasis on first-time buyers. Overall, this change in lending patterns is starting to show nationally.
The huge chartered surveyors firm e.serv have said that last month, they saw an 80% year-on-year increase in lending to high LTV borrowers. They reckon that Help to Buy has been the largest factor in this increase.
Director Richard Sexton says:
“Help to Buy is needed more than ever, as rising house prices could push more borrowers into the high LTV bracket. House prices have risen 4.3 per cent since last October, according to LSL, but that hasn’t been matched by savings rates, or wage growth. …
[Help to Buy] provides a shortcut for buyers who lack the cash for chunky deposits to be backed by banks, by bolstering their deposits, so that they can access better rates. And it encourages lenders to support high LTV borrowers too.”
This combination of high LTV products and record-low mortgage rates are generally good news for borrowers, mainly because a wider range of mortgages are being made available. We say it all the time: more choice is good for the client.
However, this is also a time when it becomes increasingly tempting to jump into making huge investment decisions quickly. Now might be an excellent time for you to buy a home, or invest in property, but don’t feel pressured by the headlines into moving too quickly. The best news you have to consider is that you have more choices in front of you.
Give us a call, and we’ll go through all of your options together, making sure you can make the best decision possible in an increasingly complicated lending market.