Mortgage brokers have reported losing clients as a result of scarce lending at 90 per cent LTV.
Rachel Dixon, mortgage adviser at RH Dixon said the “exceptionally limited” supply of products at 90 per cent LTV meant she had reluctantly recommended clients to apply for a mortgage directly.
Ms Dixon continued that the “added pressure of large, high-street banks allocating funds to the market at 7.50am, and going by 8am... [made] the pressure unbearable”.
The high LTV market has seen lenders coming in and out with restrictions on the number of applications accepted each day, limited launches, and product withdrawals after high demand.
Data from Moneyfacts shows there were 51 residential products at 90 per cent LTV on July 16, a stark contrast to the 779 products available at the start of March before lockdown. Additionally, of the total available this month, almost half (23 products) were direct-only deals.
For Kevin Dunn, director at Furnley House, the absence of high street lenders among the 90 per cent LTV tier in the intermediary channel meant losing a number of clients to direct-only deals, or lenders with restricted distribution, which he described as “hugely frustrating”.
While product sales data from the Financial Conduct Authority shows the majority of mortgage sales between 2014 and 2019 H1 have been through an intermediary, Mr Dunn described dual pricing, whereby lenders offer different rates direct and via brokers, as a practice that did not seem like lenders “look after their brokers”.
Mark Harris, chief executive of SPF Private Clients, commented: "The biggest issue has been access to the higher loan-to-value products. Some lenders have offered 90 per cent LTV but only via branches and not intermediaries.
"We have known brokers to advise clients to try applying to HSBC directly as funds allocated to the branch network could last the full day, whereas the intermediary allocation was used up by early morning."
However, Mr Harris said the benefits of using an adviser compared with a direct offering still applied, although higher LTV options via intermediaries have been limited.