I am writing this the day before the government’s Spring Statement and positively, we have not had weeks of rumour and market speculation running ahead of this specific event to grind transactions to a halt. That in itself should be welcomed by all, especially when compared to last year’s Budget.
What has been clear, however, is first-time buyers remain firmly in the government’s sights. The Chancellor’s recent backing for building societies in their efforts to support more new buyers is another signal of intent. That matters. Confidence and clarity are vital for those trying to take their first step onto the ladder.
For advisers, the key point is policy attention has not drifted elsewhere. Housing supply, affordability and access to lending are still central themes. While we wait to see what, if anything, is announced, the direction of travel appears steady.
That focus is justified. For many would-be buyers, the gap is not about willingness or even income, and neither is it about affordability in an environment where that has become more achievable. Instead, for many, it remains about deposit size. The difference between being able to borrow at 95% - or beyond - can be the difference between buying this year or waiting several more.
On an average priced home, a 10% deposit comes in at over £27,000. For a large number of renters, that is simply too big. Even a 5% deposit is a stretch once you factor in rent, bills and the wider cost of living. Every extra percentage point of borrowing capacity reduces the time it takes to bridge that gap.
We also have to be honest about how close many applicants already are. They are not reckless borrowers. They are not asking for loose criteria. They often have steady income and a sound track record. What they lack is access to that final slice of deposit. In that context, a well-priced 95% LTV - or a credible 100% - option with safeguards, is not excessive. It is practical.
If the government wants to keep first-time buyers at the heart of housing policy, then supporting a healthy, competitive high LTV market is one of the most direct ways to do it. The numbers and pricing in this segment are therefore more than a niche interest. They are a barometer of how serious the system is about turning rhetoric into results.
Against that backdrop, the state of the high LTV market takes on even greater importance. As I hope you know, each month I look at high LTV product numbers and rates, and at the start of March, we have seen some movement across the board in terms of both.
Based on the Nationwide’s monthly average house price of £273,176 – almost £2,500 up on February’s figure – which would require a 5% deposit of £13,659, we have seen an increase in 95% LTV product numbers from 263 to 271. The number of tracker/discount/variable products remained static at 19, however the number of fixes has gone up from 244 to 252.
Rates have changed over the course of the month as well, in terms of those heading up the Best Buy tables. I’m writing this before the next MPC meeting, and the mood music appears to be playing a tune which suggests a further Bank Base Rate cut, but in terms of 95% LTV product rates, that is not evident yet.
For two-year fixed rates, Lloyds remains top again but this time with a rate of 4.5%, not 4.45%, and this product as usual is still only available to current account customers. Progressive’s Northern Ireland-only deal has dipped from 4.55% to 4.53% and The West Bromwich Building Society remains in the top four, along with Furness, both with 4.54% deals.
In the five-year fixed rate space, Progressive now tops the table with a 4.54% deal, down from 4.62% last month, while Lloyds has its current account-only 4.61% product, Barclays has a 4.66% deal, and NatWest is just behind with 4.67%.
Mutuals as usual make up the bulk of the 95% LTV trackers, discounts or variable product space, with two-year discounts remaining at the top of the best buys - Progressive, Furness, Scottish and Bath all offers such deals at 4.74%.
There is little change in the 100% LTV mortgage space, in terms of us still having just six lenders offering a total of 10 products. Lloyds remains at the top of the tree with its three-year fix at 4.44% - again only for current account holders – but Bath Building Society has a two-year discount product currently available at 4.94%, while Beverley offers a 4.99% three-year discount.
For buyers who are close to achieving their goals, these products matter. An extra handful of 95% deals, or access to 95%-plus lending, can turn a near miss into a purchase. If government focus and lender appetite align, more of those renters on the edge of ownership may finally be able to make the move.
