Better deals for high loan to value borrowers

First-time buyers are finding it easier to get a foot on the property ladder, according to independent mortgage adviser, Mortgageforce.co.uk.

Better deals for high loan to value (LTV) borrowers meant that in November, 14% of all transactions arranged by the online broker were for those buying their first home, compared to the usual 10%. The majority borrowed 85% of the property’s value.

The firm’s technical manager, Katie Tucker, says: “Any lenders are increasingly able to take more risk now as their capital adequacy has improved.”

The change enabled first-time buyers to put down a typical 24% deposit in November, compared to a 28% average over the previous six months.

As an added benefit, Ms Tucker points out that borrowers can now avoid more expensive credit in funding the costs of setting up a home.

She explains that mortgage rates are relatively cheap compared to other credit and therefore provide a better option to costly credit card borrowing for home furnishings and the like.

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

Would-be homeowners were seeking out deals at 80% LTV 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.

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