Countrywide reveal a new wave of 90% mortgages for first time buyers

Countrywide Mortgage Services

Monday, February 8, 2010

Countrywide's monthly mortgage market report - January 2010

Competition between lenders for the returning first time buyer market has resulted in a new wave of high LTV products dominating the Top 10 Mortgage Applications for January, according to Countrywide, the UK's largest mortgage broker and property services Group.

The results are based on the activities of nearly 800 Countrywide Mortgage Consultants operating throughout the UK, which show that eight products in the Top 10 Mortgage Applications for January were designed with first time buyers in mind. Four of which were 90 percent LTV. (Click here to see a live feed of the Top 10 Most Sourced products by Countrywide mortgage consultants).

January's report also revealed that following the usual seasonal drop in applications in December 09, applications rose sharply in January - up 14 percent on December 09 - a 12 percent increase on January 09 .

The increasing number of 90 percent LTV mortgage products has pushed up the average interest rate of Countrywide's Top 10 Mortgage Applications to levels not seen since July 09. The average interest rate has increased from 4.29 percent in December 09 to 4.78 percent in January 10.

Countrywide's finding also support recent reports that indicate a number of lenders have pushed up their standard variable rates (SVR), which might finally tempt remortgage customers. One consequence of this action is the increase in remortgage applications with Countrywide seeing a 3 percent increase in January 10 compared to December 09 - the highest level since June 09.

Grenville Turner, Countrywide's Group Chief Executive, said:

"Activity in the market is on the up with our estate agency division reporting a 32 percent increase  in new buyer enquiries. Lenders are also moving in the right direction and our broker network has noted that there are now 85 percent more mortgage products available  compared to the same period last year.

"While the overall interest rate of Countrywide's Top 10 Mortgage Applications has increased, this is attributed to the strong return of high LTV products with four 90 percent LTVs pushing up the average interest rate, as the best deals are reserved for those with the biggest deposits.

Grenville added: "Improved lending conditions and competitive pricing is offset by the reality that customers with a 10 percent deposit could pay up to 2.1 percent more in interest, as opposed to those who can afford a 20 percent deposit. That said, from a first time buyer perspective, things are becoming more affordable and in the last few weeks we've seen a three year product originally priced at 6.59 percent drop to 5.89 percent and as first time buyers underpin the market, we hope more lenders will do the same."

Research highlights for January 2010 (based on the percentage of overall lending versus December 2009):

Countrywide's Most Sourced Mortgage Products are available to view on or call 0800 988 7925 to arrange an appointment with one of our consultants who do not charge for their mortgage advice.

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