Number of 95 per cent mortgages rocket but still remain somewhat inaccessible


The number of mortgages available on the market for those seeking to buy their first home has increased significantly since the introduction of the Help to Buy Mortgage Guarantee.

Brought in almost three years ago, the scheme has helped open up the market for first-time buyers. 95 per cent loan-to-value mortgages used to be the stuff of dreams, but now for many young people outside of the capital city, they are a reality.

In October 2013, there were only 56 mortgage products on the market which offered a 95 per cent rate, according to Moneyfacts. Now, that number sits at 271.

It seems that borrowers in London and the south of England are having trouble accessing these mortgages designed to help first-time buyers. This is despite the facts that house prices are at their highest in and around the capital city, the very place where cheap deposits would be the most helpful to first-time buyers.

On average, London had a first-time buyer mortgage size of 77 per cent loan-to value, while in the north West, this average was 82 per cent, and in Yorkshire, it was 84.5 per cent.

Where the house prices are at their highest, even a five per cent deposit is a large amount – too large for many aspiring homeowners to save up, especially while renting.

One finance expert from Moneyfacts theorised that with the rise of 95 per cent mortgages, there might, in fact, be better deals outside of the scheme which could suit people looking to get onto the property ladder, and that people shouldn’t dismiss the rest of the market and assume that the Help to Buy scheme is the only way forward.

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