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First-time buyer applications increase as LTVs soften

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by Gill Montia
First-time buyer applications increase as LTVs soften

Mortgage search engine, mform.co.uk, is convinced that first-time buyers are returning to the market in force.

According to the firm’s research, applications from this group of house purchasers have increased 30% and people buying their first home now account for 40% of all users of the mform website.

In October of last year, the figure stood at less than 10% and the change is related to the number of lenders now offering 90% loan-to-value (LTV) mortgages.

The credit crisis saw a tightening of lending criteria across the UK mortgage market, with an emphasis on larger deposits.

However, mform advises that the number of lenders offering 90% LTV deals has increased from 18 to 21 in the past two weeks.

Rates on these deals remain higher than similar loans at 80% LTV but falling house prices are tempting first-time buyers back into the market.

mform’s marketing and business development director, Francis Ghiloni, suggests that while falling prices are providing a boost for first-time buyers, lenders remain nervous on fears that the downward pressure will continue.

He adds that they are “perhaps just a bit less nervous than they were”.

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News posted: January 29, 2009

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