Simon Crone, Vice President – Commercial Mortgage Insurance Europe for Genworth, the UK’s leading mortgage insurance provider, comments on growing numbers of mortgage approvals:
“Conditions are turning in the mortgage market and there is no mistaking the huge role that Help to Buy has played in prompting the change. The number of homebuyer loans has now grown for eleven consecutive months, with a 15% increase in the last four months alone since Help to Buy 2 kicked off.
“For once, it is first time buyers who are seeing the greatest benefit. Genworth’s own research shows product choices have been transformed in that time¹: mortgages at 95% loan to value (LTV) are the key growth area for product numbers and have also enjoyed the biggest improvement in interest rates.
“It is high time that first time buyers felt this level of support as fifteen long years have passed since they were last able to put down a deposit of less than 10%. Today’s average first time buyer deposit of 20% is simply beyond the means of many people, despite being well paid and financially responsible.
“The BBA figures should put to rest any concerns that more high LTV products are fuelling a ‘bubble’. The average loan for house purchase actually fell between December and January, and is only 2% higher than it was before Help to Buy 2 launched. Not everyone needs a 95% mortgage, but it is vital these choices exist and we need to start looking for ways to support this market after Help to Buy is withdrawn.”