Relief For First-Time Buyers as Lenders Return

NatWest is the latest of the major lenders to return to the 90 per cent loan-to-value (LTV) space. From Wednesday, NatWest and Royal Bank of Scotland will offer mortgages to those with a 10 per cent deposit, after pulling out of the market in response to the pandemic earlier this year like many other lenders.

This is great news for first time buyers, following Barclays’ return to 90 per cent lending last week, after it too pulled out of the market in March. Barclays will also lend at this level to those purchasing new-build properties, unlike NatWest which will lend at a maximum LTV of 80 per cent on newbuild.

With Halifax and Nationwide returning to 90 per cent LTVs recently, life is becoming easier for first-time buyers with modest deposits. More choice should mean rates will start to edge downwards from their relatively high levels, plus service should improve as lenders will be better able to cope with demand. When these lenders pulled out of the market, it left a handful of smaller lenders offering 90 per cent products, resorting to fire sales in a desperate attempt to maintain service levels.

However, while there is increasingly more choice of higher LTV mortgage, there are still restrictions in place which means many borrowers will struggle to qualify for one. Advice is therefore more important than ever – borrowers should consult a whole-of-market broker, such as AWS, who can advise as to the best lender to approach for a high LTV mortgage. Please get in touch for more information.
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