More first time buyers to turn to high LTV mortgages

18-Jul-2007

The market for loan to value (LTV) mortgages of 100 per cent or higher will increase sharply over the next two years, with more homeowners and first time buyers looking for different ways to finance their purchase, according to a new study.

Alliance & Leicester Mortgages' research found that 78 per cent of brokers foresaw strong growth in the market within the next two years, with average estimates putting growth over that period at 9.4 per cent.

Furthermore, 74 per cent of brokers said they had already advised borrowers regarding the possibility of taking out a 100 per cent plus LTV mortgage.

"We are pleased to see that most brokers predict this market will grow within the next two years as these products offer a great opportunity for borrowers who need some additional funding," commented Alliance & Leicester's head of specialist mortgages Jeremy Claridge.

The mortgage market is continually changing and there is an ever growing need to find more flexible products to allow people to get on the housing ladder or to manage their existing borrowings in a better and more efficient way," Mr Claridge added.

The number of first time buyers taking on such mortgages doubled between 2005 and 2006, figures from the Mortgage Advice Bureau have shown.

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