The loan to value (LTVs) for first-time buyers of houses have risen from 80% to 90% and for those buying apartments, LTVs have risen from 70% to 80%. It is the first time that Santander has lent up to 90% on a new property since March 2008.

The rise for first-time buyers is available on two mortgage products, a two-year tracker of 4.99% with a £995 fee, and a three-year fixed rate loan of 5.99% with a £495 fee.

For non-first-time buyers of new-build property, LTVs will remain at 70% for apartments and 80% for houses.

A spokesperson for the Abbey for Intermediaries (AfI) division of Santander said the move should help first-time buyers get a foot onto the property ladder.

The spokesperson added: “We have seen confidence return to this segment of the property market and by increasing the maximum LTV on new-build mortgages we are able to offer prudent first-time buyers more choice and flexibility.”

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Michael Brill, director at Baronworth, said lenders were finally showing renewed appetite to compete at the bottom end of the market.

He added: “Hopefully, this will mean that other lenders will follow suit and fewer first-time buyers will be locked out of the housing market.”