Mortgage Products Launched See Increase in Small Deposit Buyers
Mortgage products that have been launched in recent months based on the latest figures show a they have contributed to a surge in small deposit buyers.
A study carried out by mortgage insurer Analysis by Genworth revealed that the number of mortgage products available to those with 5pc deposit rose to 260 representing a 84pc increase on the previous year.
Help to Buy, a mortgage guarantee scheme run by the government that offers lenders a chance to purchase protection on their loans allows them to take bigger risks, offering between 80-95pc LTV Loans.
Simon Crone, Vice President for Genworth Mortgage Insurance Europe 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.”
“For many aspiring first-time buyers, raising the average deposit of 16pc is simply not an option, especially in places like London where this amounts to vast sums of money.”
“Hopeful buyers struggling to put money aside each month can quickly see deposit sums getting further and further out of reach, which is desperately disheartening when many can afford the repayments on a mortgage once they’ve got over this initial hurdle.”
“The Chancellor’s Autumn Statement was clear that more needs to be done to help people enter the property ladder, and we welcome the new initiatives announced to achieve this aim,”
“However, these should not come at the expense of using mortgage guarantees or insurance to ensure wider access to high LTV mortgages.”
“The Government scheme has had a positive impact over the last few years, and it is dangerous to assume that this would continue without any other scheme in place that incentivises lending and manages risk at the same time.”
Mortgage Products – Plenty of choice for consumers
Since September 2013, the number of mortgage products for buyers with a small deposit has increased six times.
In the past three months alone, 68 new mortgage products hit the market, meaning more deals than ever before since the recession.
