Number of 90% LTV products reaches post-2008 high

Ryan Bembridge

November 7, 2016

houses from above

The number of 90% loan-to-value mortgage products reached an eight -year high in November 2016, Moneyfacts’ UK Mortgage Trends Treasury Report data has found.

In November there were 594 90% LTV products, the highest number since April 2008 when there were 708.

The number of 95% LTV products also reached an eight-month high of 250.

Driving the demand for technological change

Charlotte Nelson, finance expert at Moneyfacts, said increased competition has forced providers to up their LTVs to attract more members.

She added: “Providers are now finding that the traditional ‘less risky’ areas of 60% LTV are being swamped with deals.

“The Help to Buy Mortgage Guarantee Scheme made it acceptable to lend at the higher loan-to-values again after the financial crisis.

“However, with the scheme ending next month, it is hoped that the removal of this crutch won’t cause this fundamental part of a healthy mortgage market to collapse.”

After the EU referendum the number of high LTV mortgages fell slightly as providers reassessed the risks of lending to borrowers with a smaller deposit.

Therefore the number of products at 90% LTV fell from 572 in June to 560 in August, while 95% LTV product numbers fell from 249 in June to 238 in August.

Nelson said: “The Bank of England is keen to ensure that providers keep to business as usual, and after the initial shock to markets following the vote on 23 June it appears that the higher loan-to-value market is doing even better than usual.

“This shows how quickly institutions can now react and adapt to changes in the market.”

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