Mortgage War Boost for Buyers

Fri 22 Nov 2019

First-time buyers and large deposit borrowers both appear to be benefiting from the latest mortgage price war. Lenders have cut fixed rates on the lowest loan-to-value (LTV) mortgages in recent months, helping large deposit buyers get cheaper deals, but there have also been more mortgages available for those with smaller amounts to put down. Data from surveyors at e.surv predicts that small deposit buyers – those with an LTV of 85% and above – increased their market share from 28.7% in September to 29.2% in October. There was also a rise in the proportion of loans approved to those with large deposits – up to 60% LTV – from 27.9% in September to 28.8% in October. It comes despite e.surv estimating that the number of mortgage approvals actually dropped 1.2% annually last month to 65,922. The boom in high LTV loans follows data from the Bank of England’s Mortgage Lenders and Administrators Statistics in September that showed that one in 20 mortgages taken out in the three months to June had an LTV that exceeded 90%. This was the highest level since 2008 and up from the 4.5% measured in the previous quarter. Richard Sexton, director at e.surv, said: “Despite the wider property market continuing its recent slowdown, the mortgage industry has maintained steady levels of activity this month. “Rates which have fallen to a little over 1% for the cheapest two-year fixes, have helped sustain activity. “Competitive mortgage rates have ensured the entry of new borrowers into the market and meant that the industry has kept some semblance of momentum.”