The number of mortgages which have a loan to value, or LTV, of 95% hit a new peak during November this year, reaching their highest level since the recession.
The figures released by Genworth, an insurance company, show that the number of mortgages with a deposit of five percent has increased to 260, an increase of 119 during the last 12 months. The number of mortgages available with a 95% LTV has increased to six times more than in September 2013, prior to the introduction of the new Help To Buy project.
The interest rates of products available for a five percent deposit fell to 4.12% in November this year, a decrease of 1.15% since November 2014. The vice president of Genworth, Simon Crone, said:
“There is little doubt that the Help to Buy mortgage guarantee has played an important role in rejuvenating the high LTV market. However, beneath the surface, it remains a long way short of full health and there is a danger that what we are seeing is a temporary restoration of appetite from lenders thanks in no small measure to government efforts.”
The report produced by Genworth has raised concerns that the number of mortgage products available for between 90% and 95% LTV could be in decline. Mortgages for these products dropped during the third quarter of 2015 by 27%.
Crone said that for many first time buyers, especially in London, raising a 16% deposit is very difficult. Struggling to save for a deposit is frustrating, especially when the mortgage payments are affordable once a deposit has been saved. A CeMAP trained mortgage adviser will be able to offer help and advice for first time buyers.