More FTB deals outside of H2B than in
Research from Moneyfacts.co.uk found that there were just 43 products across the 95% LTV sector at the scheme’s inception in October 2013 and this number has since grown by 242%, showing a keenness to compete in what has, until recently, been an under-serviced market.
Just 13 lenders rely upon government backing to offer 95% mortgages, against 28 that have factored in their own risk elements to actively compete for first-time buyers .
Sylvia Waycot, editor at Moneyfacts.co.uk, said: “Latest official figures point to over 147,800 FTB mortgage approvals between October 13 and March 14, of which 7,313 were a part of the government scheme.
“H2B has clearly been the catalyst that kick-started lending to FTBs, but it is not the main driving force behind the sales.
“Calls for the curbing of H2B to aid any reduction in a housing bubble are unlikely to have any real effect as sales within the scheme, so far, only account for 4.94% of the market.
“The FTB market is being sustained independently by lenders, mainly building societies, outside of the government scheme.
“Non participating lenders are offering around three of every four of the 95% products available.
“The FTB market has reopened for business, and whilst H2B is useful in allowing participating lenders to share the risk, surprisingly, they are yet to show any appetite to take the market by storm.”