First-time buyers dominate mortgage searches

Figures from realpricecomparison.com show that in October and November, first-time buyers accounted for nearly a third of all mortgage searches.

However, small deposits mean would-be homeowners are seeking out deals at 80% loan-to-value (LTV) ratio or above, with around 8.5% of searches for mortgages with LTVs of between 90% and 95%.

According to the price comparison website, average rates for 80% LTV loans are around 3.62%, rising to 6.4% for borrowers looking for deals at 90% LTV.

Commenting on the data, the firm’s commercial director, Francis Ghiloni, says: “It shows that confidence is returning to the market if lenders are willing to take the risk of 90% and 95% loans again and borrowers are confident enough to search for loans.”

Mr Ghiloni believes the issues holding the market back are worries about further house price falls and pressure on lenders from regulators to hold more capital in reserve for higher LTVs.

Earlier this week, Moneyfacts reported that the UK’s mortgage lenders are becoming less fearful of offering high LTVs.

According to the price comparison website, the number of mortgages available with a 10% deposit rose from 56 in August, to 114 in November, although availability remains severely contracted when compared to the 509 loans available at 90% LTV two years ago.

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