High LTV mortgage sales down 37% in 2020

Jessica Nangle

January 26, 2021


New research by Quilter shows there were 37% fewer 90 to 95% LTV mortgage sales in 2020 compared to the average number of sales over the three preceding years.

A Freedom of Information request to the Financial Conduct Authority showed that from January to September 2020 there were 52,527 mortgage sales with an LTV of 90-95% compared to an average of 74,500 sales during the same months in 2019, 2018 and 2017.

In comparison, there were only 18% fewer 50-75% LTV mortgages issued in 2020 compared to the average number of sales during the same period over the three preceding years.

Due to the first national lockdown it is to be expected that there would be fewer house sales during this period, however this data does show that buyers looking to get higher LTV mortgage deals were disproportionately impacted.

The introduction of the stamp duty holiday in July 2020 did little to increase the numbers of 90-95% LTV sales according to the data, with just 4,356 sales taking place in August 2020 compared to 11,535 in August 2019.

Gemma Harle, managing director of Quilter Financial Planning, said: “These figures illustrate how difficult 2020 has been for the first-time buyer market who typically require higher loan to value deals.

“Since the introduction of the stamp duty holiday, many mortgage brokers will tell you that they have never been busier.

“However, the holiday has done little for first-time buyers who were paying little to no stamp duty anyway but have had the rug pulled out from beneath them as lenders exited the high LTV market meaning they needed a bigger deposit to get a foot on the housing ladder.

“Over the summer there was little to no 90% deals available coupled with a rampant housing market stoked by the stamp duty relief meaning first- time buyers were now competing in a market with more buy-to-let investors who may well have more equity and can out bid them for housing stock, and who will have seen their stamp duty costs slashed.

“More needs to be done to help Generation Rent buy their first home.

“However, the next number of months may play into the hands of some first-time buyers as once the generous government support schemes to help keep people in employment and the stamp duty relief is cut it is likely that we will see a reduction in house prices making them more affordable.”

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