High LTV loans dominate applications
Competition between lenders for the returning first time buyer market has resulted in a new wave of high LTV products being launched.
The results are based on the activities of nearly 800 Countrywide mortgage consultants operating throughout the UK, which show that eight products in the top 10 mortgage applications for January were designed with first time buyers in mind. Four of these were 90% LTV products.
January’s report also revealed that following the usual seasonal drop in applications in December 09, applications rose sharply in January – up 14% on December 09 – a 12% increase on January 09.
The increasing number of 90% LTV mortgage products has pushed up the average interest rate of Countrywide’s top 10 mortgage applications to levels not seen since July 09. The average interest rate has increased from 4.29% in December 09 to 4.78% in January 2010.
Grenville Turner, Countrywide’s group chief executive, said: “Activity in the market is on the up with our estate agency division reporting a 32% increase in new buyer enquiries. Lenders are also moving in the right direction and our broker network has noted that there are now 85% more mortgage products available compared to the same period last year.
“While the overall interest rate of Countrywide’s Top 10 Mortgage Applications has increased, this is attributed to the strong return of high LTV products with four 90% LTVs pushing up the average interest rate, as the best deals are reserved for those with the biggest deposits.”