100%+ LTV market set to grow - brokers

More than three quarters of brokers believe the 100% plus loan to value (LTV) mortgage and loan market will grow in the next two years, according to Alliance & Leicester Mortgages.

A survey of brokers, conducted by Alliance & Leicester, revealed that most are expecting to see the 100% LTV market grow by an average of 9.4% in the next two years.

The research also found that 9% of brokers expect growth of over 20% and 13% thought the market would remain at current levels. Only a small minority of brokers, 1%, predict that the market will begin to decline.

Commenting on the findings, Jeremy Claridge, head of specialist mortgages at Alliance & Leicester, says: “With increasing house prices and rising interest rates, homebuyers and remortgagers will be looking for affordable ways to get a mortgage.”

The survey also found that 100% LTV products are already becoming a commonly sought form of mortgage, with 74% of advisers saying they have advised their clients on this type of loan.

Last week, a survey revealed that the average first time buyer needed to save for five years to afford a mortgage, so 100% LTV products are likely to be popular among this group.

Claridge adds: “As borrowers look for the added flexibility a combined mortgage and personal loan can offer their clients, brokers need to ensure they are advising on all options available in the market especially in the current housing market and interest rate environment.”

Currently, there are only five UK lenders who offer bundled mortgage and personal loan products. Some providers are capable of lending as much as 125% LTV and offer facilities to make unlimited personal loan payments.

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John Bakie
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