Research out this week shows that the number of mortgages available to first-time buyers has dwindled. The number of 95 per cent loan-to-value (LTV) mortgages has reduced, according to Moneyfacts, with a 16 per cent drop over the past five months.
Why is this happening? Lenders may be concerned that property prices will fall following Brexit although it seems rather early to be making this call and the lack of supply suggests that even if there is a dip, they will recover over time. However, lenders can get twitchy about high LTV mortgages when there is uncertainty and it may be that they are reining them in for now.
Less choice for first-time buyers is unwelcome and could make it harder to get a mortgage. But it is important not to panic: seek independent advice from a broker such as Anderson Harris to ensure you are getting the right mortgage for your circumstances and make sure you don’t overstretch yourself in the first instance.
Anyone buying now at a high LTV doesn’t need to panic, however. As long as you aren’t paying over the odds for the property, can afford it and are prepared to stay in the property for a few years, even if prices dip and you find yourself in negative equity, prices should recover over time.