The number of 75% and 95% LTV mortgage products on the market has seen a significant drop of almost two-thirds as lenders respond to the coronavirus pandemic, according to data published by AmTrust.

The mortgage insurer’s latest Mortgage Loan to Value (LTV) Tracker revealed that the trend for product numbers had been upwards over the last 12 months, but that the latest figures reflected how Covid-19 had resulted in many lenders pulling products across the board.
  
The survey reviewed the number of product options available to first-time buyers with either a 5% or 25% deposit, based on several different prices of an average first-time buyer house.

For a first-time buyer home valued at £300,000, the price of a house at the starting tier of stamp duty land tax, AmTrust reported there were now 634 available 75% LTV products, which had shrunk from the 1,774 product number recorded in AmTrust’s Q4 2019 LTV Tracker results.

Similarly, the mortgage insurer reported that the total 262 available 95% lTV products in its last Tracker had now shrunk to 122 products available on the market.

Using further house price data from UK Finance and the Halifax House Price Index in its survey, the mortgage insurer suggested the numbers reflected two-thirds of products being withdrawn for borrowers who have a 25% deposit, with the market showing a similar fall in product numbers for those with a 5% deposit, albeit slightly less in percentage terms. 

AmTrust business development director, Patrick Bamford, commented: “In a very true sense, these product numbers need to be looked at in isolation, because they differ so greatly to the overwhelming trend of the last 12 months, which has seen a concerted increase in product availability.
 
“Now, we are in a very different environment. The Covid-19 pandemic hit fast, and it’s completely understandable that lenders have had to react quickly, and many hundreds of products have been withdrawn, for borrowers fortunate to have a 25% deposit or those with a 5% deposit.
 
“The slight saving grace for low-deposit borrowers is that their product choice has not dipped – in percentage terms – by quite the same amount, however we’re still at an early stage and lenders will no doubt continue to react as the days pass and we get a greater understanding of how this crisis will play out.
 
“However, it’s still important to recognise for both first-time buyers and those seeking to remortgage, that the mortgage market remains open for business, products are still available, and especially where lenders can utilise automated, or desktop, valuations – rather than relying on physical inspections – cases are progressing to offer.” 

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