Share of high LTV mortgages lowest since 2007

Share of high LTV mortgages lowest since 2007

The share of mortgages with loan to value ratios above 90 per cent in Q1 2021 fell to its lowest level since statistics began in 2007.

According to mortgage lending statistics published by the Financial Conduct Authority today (June 8), the share of mortgages above 90 per cent LTV was 1.1 per cent, 4.1 percentage points lower than a year earlier.

But while high LTV lending fell to a record low, the value of new mortgage commitments was 15 per cent higher than a year earlier, at £77.5bn. 

The outstanding value of all residential mortgage loans was £1,561.8bn at the end of 2021 Q1, 3.6 per cent higher than a year earlier. 

High value mortgages were in short supply during the pandemic with both 90 per cent LTV and above suffering.

But the products are making a comeback.

In the Budget this year, the chancellor confirmed the launch of a mortgage guarantee scheme for small deposit homebuyers, amid a dramatic decline in the number of 95 per cent LTV mortgages available since the pandemic.

And shortly after in March Accord Mortgages became the first lender to return to the 95 per cent loan-to-value market.

The number of mortgages at 90 per cent LTV had already seen the largest monthly growth in availability in January this year, according to Moneyfacts.

Paul Stockwell, chief commercial officer at Gatehouse Bank, said: “Buyers’ insatiable appetite to move home has meant the value of new mortgages started the year at highs not seen since before the 2008/09 financial crash. 

“There has been frenzied activity in the market with movers searching for larger homes and more outdoor space, while the extension of the stamp duty discount to the end of June added more fuel to the fire in the first quarter of this year. 

“The biggest stamp duty savings run out in just a few weeks’ time, yet measures from other housing indices suggest the frantic competition for property continues unabated. 

“While lending may fall from these current highs, we still expect it to be an incredibly busy summer for the housing market.”

Earlier this year, the Intermediary Mortgage Lenders Association (IMLA) said growth in the mortgage market is set to continue this year despite ongoing coronavirus disruption.

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