*For Intermediaries Only*
The majority of mortgage lenders, including us, have returned to the 95% LTV lending space - something that can only be good for those with lower deposits.
With many competitively priced 90% LTV products proving popular too across the industry, the house-buying future looks positive for those who have a little bit less to invest upfront.
Recent Moneyfacts data* highlighted that, in May this year, there were 112 95% LTV products available compared to just 41 a year before. In the 90% space the leap was even more emphatic, with 481 in May 2021 as opposed to 100 products 12 months earlier.
Of course, that availability doesn’t just appeal to first-time buyers. As brokers you will no doubt speak to people every day, each with their own circumstances, who require high LTV products.
But inevitably (and understandably) the conversation often does turn to first-time buyers when we are talking about these kinds of mortgages.
It’s a rhetoric we welcome here at The Nottingham as we feel a strong sense of responsibility and pride around helping people onto the property ladder – something we’ve been doing for over 170 years.
The entire mortgage space needs first-time buyers. Which is one reason why, despite some of the stamp duty rate charges that will begin to be phased back in from the end of June, relief for first-time buyers will remain in place on property purchases under £500,000.
They will continue not having to pay any stamp duty at all on house purchases up to the value of £300,000 and 5% on the difference between £300,000 and £500,000, if their first property falls into that price range.
From our point of view here at The Nottingham, we remain committed to doing our bit for first-time buyers too.
Take our 3.90% 95% LTV five-year fixed residential product for instance, which has had good traction since we reduced the rate by 20bps a couple of weeks ago.
It is purposely more than just a competitive rate. It offers additional appeal because, whilst it is available to anyone that it is the right product for, we very much had first-time buyers in mind when we decided it would come with no booking, admin or valuation fees.
After all, that extra bit of money is much better spent on something special for the first home – whether that be a new sofa, bed, blinds, plants for the garden or put towards new carpets.
Meanwhile, our 90% LTV products also present a no-fee option at five-year fixed, as well as other offerings including a three-year fixed. As with the already mentioned 95% LTV product, people can also take advantage of a free basic valuation and the products are portable.
What’s more, whilst the LTV of the loan is considered when we look at an applicant’s credit score we do use the same scorecard for everyone as part of a consistent underwriting process, with people not treated any differently because they are borrowing at a higher LTV.
For us it’s much more about affordability and responsible lending – doing what we can to ensure that customers can comfortably cover repayments within their fixed rate period and beyond.
Thanks for reading and best wishes.
Head of Intermediary Sales
*Data taken from Moneyfacts’ ‘Optimism evident in mortgage market’ press release of 10 May 2021.