IFAs see high demand for 95 per cent mortgages

IFAs see high demand for 95 per cent mortgages

First-time buyers are still demanding 95 per cent loan-to-value mortgages, even though part of the government's Help to Buy assistance scheme has ended.

In December 2016, the government's mortgage guarantee part of the Help to Buy scheme ended.

This had allowed mortgage lenders to purchase a guarantee from the government for people borrowing between 80 per cent to 95 per cent loan-to-value (LTV) mortgages.

Despite the end of the guarantee, Yorkshire Building Society Group, including its intermediary arm Accord Mortgages, have pledged to continue to meet high adviser demand for 95 per cent LTV mortgages.

Although Yorkshire Building Society Group did not participate in the mortgage guarantee element of Help to Buy, David Robinson, national intermediary sales manager at Accord Mortgages said advisers were still getting requests from first-time and other buyers for high LTVs.

He said: “Feedback from brokers suggests that demand for 95 per cent home loans is still high, which is reflected in the level of business we have seen at this LTV.

“Some may see the withdrawal of the Help-to-Buy mortgage guarantee scheme as a blow to first-time buyers, however there are still plenty of options available to those with smaller deposits."

Mr Robinson cited internal figures which showed the Yorkshire Building Society Group had increased its 95 per cent LTV mortgage lending by more than 50 per cent in 2016 compared to 2015.

Without government backing, the group has advanced more than £650m in 95 per cent LTV lending over the three years of the scheme.  

In addition, the Group has supported over 6,000 first-time buyers to get on the property ladder during 2016 alone.

“We are committed to helping first-time buyers get their foot on the property ladder, and the availability of competitive 95 per cent LTV mortgages plays a significant role in achieving this", he commented.

Mr Robinson added: "We will continue to lend at this level and play our part in ensuring there is still plenty of choice for first-time-buyers and borrowers with small deposits."