Lenders returning to first-time buyer market

Lenders are returning to the first-time buyer mortgage market with higher LTV products changing rapidly, new analysis from Defaqto has revealed.

In recent weeks, Defaqto suggested that lenders have started to “cautiously” return to the market and offer higher LTV loans again, with three high street lenders – HSBC, Nationwide and Metro Bank – returning to the market in the past three weeks.

The analysis showed there are also ten new fixed rate mortgage products now available for first-time buyers with a 90% LTV, taking the total number of higher LTV fixed rate products to 28.

In the wake of the COVID-19 pandemic with the property market on pause, most of these high LTV products disappeared overnight.

Defaqto noted that while the return of high LTV mortgages is good news for first-time buyers, many of these products have only been made available for a few days and then pulled from the market again.

“It can be really hard to save for a deposit for a home and high LTV mortgages are often the only way a first-time buyer can get on the ladder,” Defaqto banking expert, Katie Brain, commented. “The stamp duty holiday may help first-time buyers but without the finance, home-ownership will be out of reach for most. 

“It is encouraging to see lenders returning to the market and new products coming out for those with small deposits. We are seeing many come onto the market for only a few days and so borrowers will need to act quickly to secure these deals.

“Buying a home is a huge investment and not without risk, anyone who is looking to take out a mortgage should speak to a professional adviser before committing.”

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