More mortgage choice for first-time buyers

The Momentum UK Team 20 January 2012

The number of of secured credit mortgages for first-time buyer mortgages is on the up, according to the Bank of England's latest Trends in Lending report.

The report indicates that the number of available mortgages will increase during the first three months of 2012.

Encouragingly for first-time buyers, the report also said that the rise will "concentrate on borrowers with high LTV (loan-to-value) ratios" - or low deposit mortgages.

This, along with HSBC's pledge to pump £3bn towards first-time buyer mortgages yesterday, will come as as good news to households struggling with high rental prices and those unable to get their footing onto the property ladder.

However, another report by Moneyfacts has said that although there was a "strong resurgence" in first-time buyer mortgages, there was still an underwhelming supply for demand.

Figures from the last 12 months show that the choice of residential mortgages has increased by 26% from 2,527 to 3,180.

Most noticeable has been a resurgence in high LTV mortgages with the number of 90% loans available increasing by 40% in the last year. The number of 95% loans available more than doubled in the same period.

These high loan-to-value mortgages have become increasing difficult to find since the financial crisis took hold in 2008.

First-time buyers will have to act fast to take advantage of availability as most deals tend to be around for just 27 days before being removed due to over subscription.

As is always the case, lenders will look most favourably on borrowers with larger deposits. The biggest choice of mortgages remains around the 60 LTV tier with around 393 deals currently available.

- Please see our mortgages section for more information and advice.