Is there competition for the Bank of Mum and Dad Paul Beresford reports

By the Beresfords Marketing Team - 31st January 2013

Much to many parents relief, the ‘Bank of Mum and Dad’ looks set to be given a run for its money this year as higher loan to value (LTV) mortgages make a welcome return to the market.

Research from the Council of Mortgage Lenders (CML) has revealed that the number of 90% or more LTV mortgages available last year has more than doubled in two years and the group is confident of a further increase this year thanks to initiatives such as the Bank of England’s Funding for Lending Scheme (FLS).

In January 2011, according to Moneyfacts, there were 32 mortgage products available to those wishing to borrow on a loan-to-value ratio of more than 90%. At the end of December 2012, there were 71 such mortgage products.

In 2007, only 26% of house purchase loans were at loan-to-value levels of above 80%. But by the fourth quarter of 2012 the proportion had risen to 34%. Within this 13% of all house purchase loans in the fourth quarter were for 90% or more of the property value.

This is certainly good news for those first time buyers whose parents can’t help and have struggled to save the deposit needed to get a foot on the ladder. This is probably why the number of first time buyers entering the market was noticeably above the levels of the previous four years. These new mortgage products are supplementing the innovative schemes already available at many new developments in Essex.

Buyers at Galliard Homes’ Ashtree Place development in Chelmsford can buy a brand new duplex two bedroom apartment using the Government and housebuilder backed NewBuy scheme, which means buyers need just a 5% deposit.

The development is within easy reach of the city centre and mainline train station and benefits from a private roof garden. With a number of eco features, including solar roof panels and rainwater harvesting systems, buyers can also save money on their energy bills once they move in.

Buyers of this two bedroom house in Braintree would require a deposit of just £14,500 if they secured a 90% mortgage. Requiring some minor refurbishment to bring it up to date, the property features a large rear garden and there is no onward chain.

For something perhaps more manageable in size, our Billericay office is selling this classic one bedroom starter home. Benefitting from excellent built in storage space, a modern interior and integrated appliances, it’s ready to move in to straight away!