Potential buyers have been given something of a boost, as it seems high loan-to-value mortgages are returning to the market.
Last week we reported that both Halifax and Virgin Money launched 90% LTV mortgages.
Meanwhile Nationwide has loosened its criteria on 90% LTV, as the society previously only allowed gifted money to make up 25% of deposits.
Today it emerged that Landbay increased buy-to-let LTVs to 80%, so we’re seeing a similar trend in buy-to-let as we are in residential.
Given that first-time buyers are the lifeblood of a market, I’m pleased that lenders are catering for them once again.
However, you still have to question whether now is a good time for first-time buyers, largely due to the stamp duty holiday.
Inexperienced buyers currently have high competition to buy a property, which is pushing house prices up. Indeed, Nationwide put annual house price growth at a 5-year high of 6.5% in November.
Meanwhile there’s a very real prospect of buyers missing out on the stamp duty holiday due the sluggish nature of the market, unless the government puts an extension in place.
On this point I must confess I’m surprised.
I thought it very likely the government would change the rules around the stamp duty holiday by now – perhaps make it so people get the reduction if they apply for a mortgage before the deadline, rather than when they complete.
If thousands of buyers do miss out on the holiday it could cause transactions to fall through, which would be a PR headache for the government and cause some housing market instability.
With this in mind, I still wouldn’t be surprised if an announcement was made to eliminate the cliff edge of the stamp duty holiday in the coming weeks.
Ryan Bembridge, Editor, PropertyWire
