The Inside Edge
A report released by chartered surveyors e.surv revealed that mortgage approvals on deals of 85% LTV and higher reached peaked in the month of August. These figures account for 10% of total approvals.
However, e.surv said that whilst these figures are encouraging, they should not be seen as a sign of long-term market recovery. High loan to value approvals are still less than half of the peak experienced in August 2008.
More and more lenders are starting to ease their lending criteria slightly and this has helped to fuel an increase in the number of ‘low income buyers’. The greatest growth has been experienced on properties with a value of up to £125,000 – these are typical first-time buyer homes. These homes accounted for 24% of all approvals.
Richard Sexton, business development director of e.surv said: “The uptick in high LTV lending is encouraging, and lenders may still be trying to garner market share. But we shouldn’t get too carried away and begin hailing this as a portent of long-term recovery.
“High LTV lending still lags well behind the levels we saw back in 2008 and a slight loosening in criteria only makes a small dent in the vast backlog of buyers stuck in the rental market.”
He added that many high street banks and building societies are still constrained by the weak market and other factors such as strict regulatory controls.
Sexton said; “For those who can get mortgages, the good news is that fixed rate deals seem certain to remain particularly cheap. The UK has been like a fortress in repelling the international economic contagion, which is good news for borrowers as it means repayment rates will stay low for some time to come.”
Finding the right mortgage product to suit your circumstances is a lot easier if you get independent mortgage advice. A mortgage broker will be able to give you a whole of market appraisal of all mortgage products including those lenders offering higher LTV products. We reported last week that the 100% mortgage is back and it looks likely that lenders will slowly start to increase their LTV percentages although strict controls will still be in place.