Recent data has found that lenders are making it slightly easier to obtain a mortgage, as reported by BBC News. The number of mortgages needing a 15% minimum deposit has increased from 189 to 226 in the past month, reaching the year’s peak. The number of mortgages for the same period requiring a 20% deposit has dropped from 136 to 117.
Despite the figures switching, two-thirds of mortgages that require a smaller deposit was good news for first time buyers. It is also encouraging news that the 85% loan to value mortgages had increased in the last month. This could indicate that mortgage providers have been watching house prices and regained confidence in the market.
The easing may also reflect an increase in lender competition. Northern Rock, for example, have re-entered the market with some aggressive deals.
This has increased competition for lower loan to value deals, which has pushed other lenders towards lending more at higher loan to value.
According to recent CML figures, more first time buyers are still required to put down a 25% deposit. It does appear, however, that lenders have relaxed slightly their fear of losing large amounts if the borrower should default.
The fact that lenders are becoming more relaxed with LTV is a good sign for the property investment market which means investors could soon get mortgages more easily, and buy to let LTV could be next for lenders to relax on.