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Northern Rock says 95% LTV mortgages are a specialist market

The first-time buyer higher loan-to-value market should be considered a niche area, according to Northern Rock head of intermediary sales Richard Tugwell.

Speaking at the Imla executive briefing in conjunction with Money Marketing, Tugwell (said the capital requirements placed on lenders when lending on higher LTV mortgages means this type of lending has become a specialist market.

Tugwell said: “Current market conditions have created a new niche market and that is the higher loan-to-value first-time buyer market. Not many are playing in that sector. Some are more active in it but the capital restrictions make it difficult. There are people who are turning to the private rented sector that do not want to but have to.”

Imla executive director Peter Williams said it is unlikely that many lenders will be looking to lend at 95 per cent LTV due to capital requirements and house price volatility.

He said: “The standard first-time buyer product has been a 95 per cent LTV mortgage. There are few of them around and I do not think there are going to be lots of lenders piling into them because of the risk-weighting and house price uncertainty.”

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