Number of high LTV mortgage deals in the UK fall significantly

In the last year, the amount of first time buyer products decreased by 31% from 1,786 in 2011 to 1,225 in 2012, the research from MoneySupermarket reveals. It means that at a time when first time buyers are needed to boost the flagging residential property market their are fewer products for them to choose from and the number of products for those with small deposits has fallen significantly. Analysis by the comparison site found the number of 90% has fallen from 330 products this time last year to the 244 now. It’s a similar story with 95 per cent mortgages. In the last six months alone the number of mortgages available for loans up to 95% of the property’s value has fallen from 49 products to just 28. Looking specifically at loans for first time buyers, there has also been a significant reduction of mortgage options. In the last 12 months, first time buyer mortgage products have fallen from 1,786 to 1,225. A number of lenders that were offering 95% mortgages six months ago have since withdrawn them from the market. These include Cambridge, Ipswich, Nottingham, and Skipton Building Societies. ‘Our analysis shows the continuing difficulty facing first time buyers and those with smaller deposits looking to find a suitable mortgage. Despite the launch of the Funding for Lending Scheme which was designed to encourage further mortgage lending by the banks, there appears to be few signs that the initiative is helping those with small deposits,’ said Clare Francis, mortgage expert at MoneySupermarket. ‘It is still early days and we won’t see any data on the impact of the initiative until the end of the year, but so far there is little to indicate that the scheme will kick start the beleaguered mortgage market,’ she added. Meanwhile, the Yorkshire Building Society is one of the latest lenders to reduce rates. All its 75% LTV and 85% LTV fixed and tracker mortgages have seen a rate reduction of up to 0.30%. Headline products include a 75% LTV two year fixed rate mortgage at 3.24% and 75% LTV three-year fixed rate mortgage at 3.49%, both with £995 fees. Lower fee options and products with incentives, including free legal assistance and cashback on completion, are also available, plus offset variants. They are available in branch, online and through the Yorkshire’s telephony service. ‘Whether borrowers want the security of a fixed rate product or the flexibility of a tracker mortgage, these rate reductions will result in significantly lower repayments for borrowers. We are constantly reviewing our mortgages to make sure we continue to offer competitive products at the same time as the excellent service our customers expect and deserve,’ said Yorkshire Building Society Group’s direct mortgage manager Chris Smith. ‘It is important to note that, as a responsible lender, we have made reductions at higher LTV levels and are not just cutting rates for those with large deposits. Together with our existing range of competitive 90% LTV mortgages, our portfolio offers a huge variety of options for first time buyers as well as other house purchasers and those remortgaging their property,’ he added. Last month the Yorkshire announced in its half yearly results that gross mortgage lending had increased by 58% compared to the same period last year.