Fewer deals on offer for first time buyers

Ben Southwood
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THE MORTGAGE market has tightened up over the past six months, but remortgage lending has bounced back, according to reports.

The number of high loan-to-value (LTV) mortgages has plummeted, with a collapse in 90 per cent and 95 per cent mortgages offered, MoneySupermarket said yesterday.

Its data shows that 95 per cent mortgage availability has dropped by 75 per cent in the past six months. In that period lenders including Cambridge, Ipswich, Nottingham and Skipton Building Societies have withdrawn such products from the market.

These developments have squeezed first-time buyers, who have a choice of 31 per cent fewer financial products this year than in 2012, This is despite the funding for lending scheme (FLS) which aims to encourage banks to make more money available to borrowers, which could fund house purchases.

But those who already have a foot on the housing ladder are beginning to be offered more extensive opportunities, according to property services expert LMS.

Gross remortgage lending grew 12.9 per cent in the month to July, and though it remains 12.5 per cent down on last July, LMS expects that the recent tranche of easy money offers on low LTV mortgages will reverse this trend.

“A number of sub three per cent rates…led to a real surge in remortgage applications in late July that continued into August,” said LMS boss Andy Knee.