Mortgage lenders remain cautious over loan-to-value ratios

The anxiously awaited recovery of the UK housing market is still blighted by mortgage lenders’ demands for high deposits.

Latest figures from financial website, Moneyfacts, show the number of home loans on offer increasing to 1,485, up from 1,398 in March.

However, over two-thirds of the deals on the market require a deposit of at least 25%.

The proportion is still rising, with 68% of home loans sporting a loan-to-value (LTV) ratio of 75% or below on 6th April, compared with 66% a month earlier.

For potential first-time buyers requiring high LTVs, the trend is particularly damaging with the number of mortgages available at 90% LTV falling from 101 at the beginning of March to 93 on 6th April.

Those with a 15% deposit are better placed as the number of mortgages at 85% LTV rose from 237 to 258 during the same period.

As ever, Moneyfacts reports that the most attractive deals are reserved for those with sizeable deposits or amounts of equity in their properties, at 60% or 75% LTV.

In this area of the market the range of loans has increased in the past month, up from 921 at the start of March to 1,016 at the beginning of April.

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