Strong Growth In High LTV Mortgages Reported
Fri, 13 Jan 2012
The number of high LTV mortgages advanced increased by 32 per cent between 2010 and 2011, according to new figures from e.surv.

The company’s latest mortgage monitor showed that a total of 57,301 loans at an LTV of 85 per cent or more were taken out in 2011, compared to 43,379 the previous year.

The data also revealed that there were 12,343 loan approvals for purchase of homes worth £125,000 or less in December 2011, up 25 per cent year-on-year, while the average loan-to-value on first time buyer property rose 4 per cent to 69 per cent, as more buyers were able to access higher LTV mortgages .

Overall, mortgages for house purchase were 3.4 per cent higher in 2011 than in 2010, with 590,733 purchase approvals during the year - 19,203 more than in the previous 12 months.

Richard Sexton, director of e.surv, said: The improvement in 2011 is modest, but when taken against the backdrop of the eurozone crisis and turgid economic growth, it's clear the market demonstrated real staying power last year."

"Banks have made a concerted effort to increase the amount they lend to first time buyers, which is reflected in the big jump in higher loan-to-value lending . They are also supplementing this with more lending to buy to let investors."

Looking ahead, he commented: "2012 will be a difficult year. Banks will pass the increased cost of funding themselves onto the consumer, and will likely focus on hoarding capital rather than new lending . A flat market looks like the best we can hope for."
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