Product price war at 60pc LTV

Sarah Davidson

October 29, 2012

Moneyfacts research showed that while this low risk category has increased by more than 2000%, 90% LTV products slumped from 894 to 292.

And since the Funding for Lending Scheme was introduced in August this year, the number of 60% LTV products has increased by 87 while 90% LTV has only seen 29 new additions.

Sylvia Waycot, of Moneyfacts.co.uk, said: “In 2007 lenders offered high loan to values as a norm. High income multiples and sub-prime were not automatically rejected.

“This all changed in 2008 with the onset of the banking crisis. High loan to values quickly disappeared and even today are few and far between.”

She added: “They were predominately replaced with the 60% loan to value which is virtually riskless to any lender and as a result, the first-time buyer market has stagnated.”

However the government has not specified that lending should be for higher LTVs which has resulted in a glut of 60% LTV products which do not help first-time buyers.

“This means more lending to those who already have excess choice whilst everyone else it would seem, may as well be whistling in the wind,” said Waycot.

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