Prime Minister Boris Johnson has pledged to encourage more high loan-to-value (LTV) mortgages to the market – but CJ Hole’s preferred mortgage partner has insisted more detail on the Prime Minister’s plan is needed.
Mr Johnson outlined his vision to the virtual Conservative Party conference this week in a bid to help first-time buyers take their first steps on to the property ladder.
He said: “We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95% of the value of the home - vastly reducing the size of the deposit and giving the chance of home ownership - and all the joy and pride that goes with it - to millions that feel excluded.
"We believe that this policy could create two million more owner-occupiers - the biggest expansion of home ownership since the 1980s.
"We will help turn generation rent into generation buy."
Liz Syms from Connect Mortgages said: “Since the lockdown, there has been a clear lack of high LTV mortgage products restricting the options for first-time buyers.
“The market has relied on lenders issuing limited tranches of products or offerings that involve family guarantees. Insurance-backed schemes that were intimated in the speech are not new.
“Those who have been in the mortgage market for some time will remember 'indemnity insurance' which provided security for lenders against the risk of default when offering a high LTV, but the applicants had to pay the cost of the insurance.
“Any initiatives that enable lenders to become comfortable again lending up to 95% will be very welcome, but we look forward to seeing the detail!”