Mortgage lenders are beginning to return to higher loan to value ranges, as three lenders have announced they will resume offering products at 90 per cent amid a “more active housing market”.
Nationwide Building Society has announced an increase in the lending limit to 90 per cent LTV for first-time buyers from July 20, with no set limit on the number of home loans available.
The building society said its return to higher LTV lending was enabled by the temporary stamp duty cut, announced by the chancellor last week, as well as a “more active housing market” following the lifting of lockdown restrictions that had effectively closed the property market until May.
Nationwide’s 90 per cent LTV mortgages will be available to first-time buyers direct and via brokers.
Henry Jordan, director of mortgages at Nationwide Building Society, said: “First-time buyers are vital to breathing life into the housing market and economy. We understand one of the biggest barriers to homeownership is raising a deposit. As a building society, owned by our members, we are extremely well placed to look at ways of helping people into a home of their own.
“While we will continue to monitor the market carefully, we feel it is the right time to enhance our lending, initially to those looking for their first home. We welcome the government’s announcement on stamp duty and hope our combined changes create a positive impact on a market that, despite being in relatively good health, is still recovering.”
Existing Nationwide mortgage customers who are moving home will be able to continue borrowing up to 95 per cent LTV, while the maximum for further advances has increased to 90 per cent LTV.
Meanwhile Coventry for Intermediaries has also announced its return to the 90 per cent LTV market with a limited launch.
The lender is offering two five-year fixed-rate products to new and existing borrowers from 8am today (July 14) until 8pm tomorrow.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said it was “fully prepared to meet strong demand” throughout the two-day window.
Mr Stinton said: “This is about supporting the market without compromising on the high levels of service that we’re famous for. Transparency and certainty – especially in this environment – is essential for brokers so they can support their clients, which is why we have issued our pledge of 48 hours notice of withdrawal of these products at time of launch.
“We expect the next couple of days to be really busy and brokers can help us to process applications smoothly. Checking our criteria beforehand – particularly on self-employed and furloughed employees – will help to speed up the process for everyone.”
Mr Stinton added: “Only full applications will secure the product – as all AIPs will be temporarily suspended during this period. All the details are on our website along with a dedicated coronavirus update page”.
Additionally, in an email to brokers seen by FTAdviser, intermediary lender Platform announced it will be reintroducing a fee-free, five-year fixed-rate product at 90 per cent LTV to new business on July 15.
Platform had temporarily withdrawn its 90 per cent LTV fee-free range available to new business on July 9 due to “unprecedented demand”.
Chris Sykes, mortgage consultant at Private Finance, commented: “Three lenders announcing their return in one day should spur on other lenders to do the same.
“We have seen issues in the past few weeks with the lenders offering 90 per cent mortgages being inundated with applications and not being able to cope with the level of enquiries so spreading the cases more is an encouraging sign signally a potential widespread return of 90 per cent mortgages.”
Accord Mortgages, for example, temporarily withdrew its 90 per cent LTV products a second time this month, as the lender said it experienced the busiest month in its history.
Mr Sykes added: “With Nationwide being one of the biggest lenders for first time buyers hopefully it encourages the likes of Santander and Barclays to return to this market in the near future too”.
Data from Moneyfacts shows there were 72 residential mortgages available at 90 per cent LTV on June 26, less than 10 per cent of what was available at the beginning of January (751 products).
chloe.cheung@ft.com
