First-time buyers suffer from cuts to higher loan-to-value lending

Chris Papadopoullos
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THE HIGH loan-to-value (LTV) end of the mortgage market is in decline, according to figures published today by insurance firm Genworth and comparison site

The value of loans with a 95 per cent LTV ratio, where 95 per cent of the value of a property is borrowed, dropped by £147m year-on-year during the first three months of the year. This has contributed to a 10 per cent fall in first-time buyer numbers, which means that 10,400 fewer people have succeeded in buying their first home so far in 2015 than was the case last year.

It comes despite mortgage rates falling to record lows due to factors such as competition between lenders and low Bank of England interest rates. It also comes amid a rise in the number of high LTV products on offer, but lending per product has fallen.

“Saving more than a five per cent deposit is not achievable for many people, so falling rates and a rise in the number of 95 per cent LTV products – from building societies in particular – should be signs of better things to come for first-time buyers,” said Simon Crone, a vice president at Genworth.

“But these trends do not present the full picture in a climate where regulatory pressures are weighing heavily on lenders and limiting their capacity to offer traditional first-time buyer loans.”