Applications from first-time buyers now make up more than 40 per cent of all applicants through the mform.co.uk service compared with less than ten per cent in October last year, the online mortgage company says.
First-time buyers, they say, have more lenders to choose from and more products to apply for – currently 21 lenders are offering 75 deals at 90 per cent loan-to-value compared with 18 lenders competing in the market just two weeks ago.
There are even three lenders – Clydesdale/Yorkshire Bank, Abbey and Ipswich Building Society – offering loans at 95 per cent.
But best rates at 90 per cent and 95 per cent remain much higher than for comparable deals at 80 per cent loan-to-value.
Best Deals
Currently the best fixed rate at 80 per cent comes from Derbyshire Building Society at 4.99 per cent while the top tracker deal is from First Direct at 3.39 per cent, says mform.
At 90 per cent loan-to-value, Lloyds TSB offer good value with a deal at 5.69 per cent fixed for two years, and the Norwich & Peterborough standard variable rate at five per cent is difficult to beat for those looking for a variable rate.
And the deals at 95 per cent are 6.99 per cent and 7.05 per cent from Clydesdale/Yorkshire and Abbey. Fees on Clydesdale and Yorkshire are £599 while Abbey charges a £2,499 application fee and a higher lending charge of £3,200.
Lenders Less Nervous
Francis Ghiloni, Marketing and Business Development Director of mform.co.uk, said: "In October it looked like first-time buyers were about to disappear but since then we’ve seen real signs of a revival and a general rise in applications.
"However rates above 80 per cent loan-to-value remain high and fees add considerably to the burden. With forecasts that house prices will continue to fall lenders remain nervous but are perhaps just a bit less nervous than they were.
"Currently more than 51 lenders offer 255 products for customers with 20 per cent deposits – that is more than double the number of lenders and three times the products available at 90 per cent."
