Frozen Mortgage Market Starts to Thaw a Little

Both The Times and The Sun newspapers ran articles last week (29 July 2011) reporting some good news for first time buyers with a 10% deposit.

Their research shows that the number of mortgages for smaller deposits has hit the highest level since November 2008 (just before the credit crunch started to impact lending conditions), with each newspaper reporting that 90% Mortgages are edging their way back into the market for borrowers who have the right income multiples.

Research by moneysupermarket.com shows averages rates on fixed rate products for 10% deposits starting to fall. Skipton Building Society is amongst the Lenders offering 90% (and even 95%) mortgages, and it has reported that its lending has nearly doubled since 2010. The Chief Executive of Skipton Building Society said “We are cautiously encouraged by recent trends and believe higher loan to value loans are sustainable, subject to affordability criteria including income multiples and total indebtedness”

For most of 2009 and early 2010, the average loan to value was 75%. Could this be the tip of the mortgage market beginning to thaw? We are watching with interest!