95% mortgages decline further

Recent reports have suggested that 95 percent mortgages, which were once the most common mortgage type, have declined further, with the increase in the number of lenders pulling these deals from the market resulting in just two lenders now offering these mortgages. This type of mortgage was once offered by many lenders, but according to report only two now remain.

The Ipswich and the Abbey are now said to be the only two lenders now offering this type of mortgage, and this is according to mform.co.uk. It also claims that an increasing number of providers are now looking to get larger deposits from borrowers, with many being expected to pay 10 percent or more of the value of the property by way of a deposit.

One official stated: “With house prices down up to 16 per cent in 2008 and interest rates at historic lows the conditions are almost exactly right for first-time buyers to come back into the market. The only fly in the ointment is admittedly the rather large problem that lenders are just not lending. It is incredible to remember that in April last year there were still plenty of 95 per cent mortgages around. Now there are just a handful of 90 per cent loans and it is incredible that the Government-backed banks are not at the forefront of the market. They’ve been bailed out so now would be the time to lend.”