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Countrywide reveals 96% surge in high LTV mortgages

The number of clients borrowing 85% or more of the value of their property has surged 96% in the last three months, according to Countrywide Mortgage Services.

The business’ monthly market report for August, out today, also reveals that the most popular mortgage product applied for across the UK was 90% loan-to-value, fixed at 6.49% for five years with no arrangement fee, followed by a 75% LTV deal fixed at 4.39% for one year with an arrangement fee of £495. Overall, the minimum deposit required for the top 10 products sourced through Countrywide Mortgage Services increased 18% last month, up 2% on July.

Some 52% of applications were for two and three-year fixed rate products last month, while 22% were for five-year fixed rate deals - an increase of 4% on July. The average deal rate was 5.49% - for both transactional and remortgage customers - which is 0.1% down on July and 0.92% down on August 2008.

Of the business' remortgage applications, 82.24% were fixed rate, which is a 1% decline on July.  Some 68% of buy-to-let mortgages were fixed rate, which mirrors July’s deals.  

Grenville Turner, Countrywide’s chief executive, says: “Affordability is a key issue for UK house buyers. Buyer appetite is strong with house sales up 53% in August, but large deposits are now the biggest hurdle facing home movers. We’ve seen that mortgage customers are prepared to pay the price.

“The market has changed. Interest rates do not sell mortgages on their own – especially if they require a 30 or 40% deposit. The LTV is now a critical factor in people affording to move – despite higher interest rates.”

He adds: “We’re now starting to see the return of a small number of 90% LTVs, offering some scope for buyers with small deposits to enter the market. These products are generating the highest levels of enquiries across our network and more are needed in order to keep the property market moving.”

Countrywide Mortgage Services employs nearly 800 mortgage consultants across 1,000 branches in England, Scotland and Wales. Its mortgage lender panel includes Abbey, Halifax, Nationwide and NatWest.

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