Boom in mortgages for low deposits, poor credit and those nearing retirement

The number of mortgage deals at 90% and 95% loan-to-value is at its highest level since March 2008, a 17-year high, according to new research. The availability of deals at the 90% loan-to-value tier rose to 845, also at its highest point in 17 years. There has been a boom in products available for people with low deposits, poor credit and those nearing retirement, say experts.

Ben Perks, Managing Director at Orchard Financial Advisers says: "The bottom line is, lenders are really keen to lend and they’re looking at more ways to do so. If they continue to innovate, the future is bright for borrowers." New data published by Moneyfacts has revealed that the availability of deals at the 95% loan-to-value tier rose to 442, compared to 575 in March 2008.



Elliott Culley, Director at Switch Mortgage Finance adds: "With mortgage rates much higher over the past two years, demand for mortgages from first-time buyers has dipped. "As a result, mortgage lenders have had to become more flexible. For some, this has meant relaxing certain lending criteria, whilst for others it has meant moving into lower deposit mortgages.

Mortgages have now become far more accessible, albeit more expensive." But, as Peter Dockar, Chief Commercial Officer at Gen H says, it's not all good news: "Low deposit schemes are very helpful for a specific type of buyer, such as those with high salaries and low savings. Recommended reading: Martin Lewis: Biggest factor to change mortgage rates Martin Lewis urgent warning for DWP tax credit claimants DWP State Pension age will have to rise to 71 says report "But there is a much larger problem, and a much larger group of aspiring buyers, who are not helped by these schemes.

This is because low deposit schemes don't account for the massive affordability challenges faced by buyers today. "The average house price in the UK is 8x the average salary; this rises to 13x in London. "There is no way that most buyers with small deposits would pass affordability to purchase one of these homes, especially given lenders' LTI flow limits.

New mortgage products and schemes must focus on addressing both of these barriers – deposit and affordability – in tandem, otherwise thousands will remain locked out. All this is to say, mortgages may be friendlier, but they're certainly not yet friendly enough.".