The number of products available with 5% deposits has increased across all categories, AmTrust’s latest Mortgage LTV Tracker has found.
The differential between the average rates taken by those with 25% deposits compared to those with 5% has widened further to 1.56%.
At 75% LTV, average rates have dropped to 1.44% and at 95% LTV average rates have risen to 3%.
Patrick Bamford, business development director at AmTrust Mortgage & Credit, said: “There has been a slight upturn in terms of product choice for 95% LTV borrowers in this latest version of our LTV Tracker with, for the first time in two quarters, an increase in product choice for those with a 5% deposit.
“This adds to the other positive news which is a slight drop in the average deposit required by high LTV borrowers and a corresponding fall in the average amount payable each month, but these are only very marginally and are unlikely to make a major difference to those seeking to get on the housing ladder.
“The more worrying trend remains an increase in average rates for 95% LTV borrowers and an increase in the rate differential between these first-timers and those with a 25% deposit.
“We still see the latter group paying 50% less each month in mortgage payments than high LTV borrowers, and this is a trend that shows no sign of changing.
“It means that any potential first-timer who wants to get anywhere near the most competitive rates in the market, needs a significant deposit to do so.
“At current levels that means having to save over £55,000, or be lucky enough to have the Bank of Mum and Dad to call upon – given this situation, it is perhaps not surprising that the number of mortgages available to those in such a fortunate situation continues to grow.
“We are however in danger of creating a mortgage and housing market which can only be accessed by those with family support and this is likely to mean significant numbers of potentially credit-worthy borrowers not being able to become home-owners.
“With a new government in place, the market will be watching March’s Budget very closely to see if there is any further support to be provided to first-timers, plus of course next year the Help to Buy Scheme will be changed so it is only accessible by first-timers.
“However, what we need to see is a greater focus on providing high LTV loans, not just for those starting their property journey but those already on the ladder who might wish to move up.
“Regulatory factors play a major role in curbing the amount of high LTV lending lenders can currently write, and we would like to see these addressed and amended, in order to allow lenders to write more business with those borrowers who do not have the support of family and friends to get on the ladder.”
Over six times as many products are available in the 75% LTV categories compared to 95% LTV.