Surge in low-deposit mortgage availability
According to the latest Bank of England Credit Conditions Survey, mortgage lenders agreed that 2013 ended with far higher credit availability at 75 to 95% LTV and more lenders will be willing to lend above 95% LTV in Q1 this year.
This appetite is driven by market share objectives, higher expectations for house prices and an increased appetite for risk. However, credit scoring criteria has also been loosened with more generous lending likely to bring a commensurate fall in credit quality in Q1, say lenders.
Jonathan Harris, director of mortgage broker Anderson Harris, said:
“More lending is being done at higher loan to values which is great news for those with modest deposits who may otherwise have struggled to get a mortgage. However, while this will help get the housing market moving with more transactions lower down the ladder, it’s important that borrowers do not overstretch themselves.”
Lenders said high LTV lending was boosted by participation in the Government’s Help to Buy Scheme or competition the scheme had created.