There were, after all, more than 800 different mortgages available at 95% LTV and they were flying of the proverbial shelves at what was a lucrative, if unsustainable rate.
As many analysts have pointed out, if one compares the latest lending figures to those at the height of the pre-crisis boom, the market looks like it may never return to those halcyon days when mortgage finance was readily available to an eager body of homebuyers.
But while gross lending in 2011 was only 38% of the total in 2007, lenders have shown they are not yet ready to give up on providing finance to borrowers with limited deposits. Since the beginning of 2012, the number of loans on offer has tripled and mortgage interest rates have dropped.
Those who suggested the falling rates offered by lenders were no more than a rush to drive sales to fulfill end of year targets appear to have misjudged the confidence and commitment of the lending industry.
Mortgages for Business has shown there are currently 21 Buy-to-Let mortgages on the market at 80% LTV or higher and West One loans reports brokers expect a 27% rise in bridging activity in the next year.
Leeds, Newcastle and Ipswich building societies have all launched 95% LTV deals and Nationwide and Lloyds have also launched schemes to make finance available for those with a 5% deposit.
This news flies in the face of those predicting meltdown in the UK property market this year. The dire fiscal position of Greece and its Mediterranean neighbours could, if not carefully controlled, cause a liquidity shock that might force lenders to tighten the purse strings.
On top of this looming threat, economic pessimists point to the fall in GDP in the final quarter of last year and the 0.5% fall of house prices in 2011 reported by LSL/Acadametrics to show any recovery in lending is just a flash in the pan.
But so far lenders in the UK have implied they don’t expect prices to drop far this year. Their return to the 95% LTV market is a resounding gesture of confidence.
Nonetheless, lending is still at less than half its pre-crisis level and that means there are plenty of buyers struggling to acquire finance. According to research by Halifax, renting is now 16% more expensive than buying, as demand has soared from buyers unable to access finance with which to leave the private rental sector.
For this reason, the finger is frequently pointed at lenders for failing to sufficiently support the property market, driving money into the hands of landlords.
But the lenders are taking steps wherever possible to make finance available in a sustainable way. The irony of the current position is that those complaining about the iniquity of the current housing market, in which rents have been driven up by tight mortgage lending, are the ones seeking a return to the days when mortgage lenders made profit from an unsustainable situation.
It is now the lenders, rather than property buyers or politicians who are working to reach a sustainable equilibrium.
