Southampton: Hope for first-time buyers with 90% LTV mortgage surge

The property market has experienced a resurgence of low-deposit mortgages with increasing numbers of lenders offering 90% loan-to-value (LTV) products. The low-deposit comeback is likely to initiate a further rise in the demand for property from first-time buyers and those who are still holding their breath for a much-wanted stamp duty holiday extension.

Research by Moneyfacts, the financial information service, has revealed a staggering increase in the number of mortgage deals in recent weeks – from 160 deals available on January 1 to 277 on February 12. But, more significantly, the availability of 90% LTV products leapt from 32 to 47 in the same period and, with cashback deals for first-time buyers with a 10% deposit increasing to 83 from 50 just a month ago, there’s fresh hope for those wanting to get onto the property ladder.

"We’ve seen a surge in the availability of low-deposit mortgages since the start of the New Year," revealed Alain Amos, managing director of Charters Financial Services. "Before Christmas, the restrictive conditions of the few high LTV providers around had made it difficult, if not impossible, for many prospective borrowers to take advantage of products that were on offer for limited periods.

"Fast forward just a few weeks and, with the earlier stipulations being removed from what are now core range products for the majority of high street lenders, low-deposit mortgages have made a welcome comeback. There is now a real opportunity, in particular for many first-time buyers, to join the mortgage market having been locked out of it for much of 2020."

Indeed, Eleanor Williams, finance expert at Moneyfacts.co.uk, has pointed to the potential for a concrete strengthening of the first-time buyer market.

"There are of course still hurdles for these borrowers to overcome," she explained. "House prices inflated quite significantly last year – although early indications are that this may be slowing in 2021 – and savings rates have continued to descend to rock bottom lows, making building a larger deposit difficult, as have high rental payments. But their options have been steadily increasing and, added to the news that the homebuyers using the current 'Help to Buy' equity loan scheme have a further extension on the deadline for completions, there is hope that 2021 may see more potential homebuyers take that first step onto the property ladder.’

If a low-deposit mortgage sounds appealing, the renewed scope for a great deal makes this the perfect time to speak to a mortgage broker who can give you all the advice and support you need in choosing the best deal. Contact Charters' specialist mortgage experts on 08454 500200 to talk through your options.