Its quarterly LTV Tracker found lenders had absorbed the Bank of England base rate rise and further cut rates on 95% LTV products by an average of 34 basis points over the third quarter of 2018.

With rates on 75% LTV deals increasing by only one basis point from the second quarter of the year, it means the gap between 75% and 95% LTV rates has shrunk to around 1.86% from 2.21% in July.

AmTrust said it believes that “as the year comes to a close there will be greater competition in the high LTV sector as lenders seek to secure increased business from first-timers and greater margin on their loans.

“Even with further increases to Bank Base Rate (BBR), product pricing for lower-deposit mortgages may sustain their competitiveness as lenders look to increase business share in this part of the market,” it added.

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Product numbers soaring

Greater lender interest in first-time buyer business is also being reflected strongly within the market with a growing number of products for both 75% and 95% LTV borrowers, AmTrust found.

For those wishing to purchase an average first-time buyer home or an average-priced UK house, two-year product options at 95% LTV hit three figures for the first time.

Meanwhile all 75% LTV product numbers also increased.

However, there is a marked disparity between those with a 25% and 5% deposit, with hundreds or even thousands of products targeted at those with larger deposits.

It also noted that the biggest concern to securing a property remained achieving the required deposit.

 

Significant deposit to find

AmTrust Mortgage & Credit business development director Pad Bamford (pictured) said there was a lot to be encouraged about in this quarter’s report with cheaper rates and a greater number of high LTV products, but concerns remained.

“Saving for a deposit remains the biggest barrier to overcome and we are still at a point where many potential first-timers can only get on the housing ladder with the support of the Bank of Mum and Dad,” he said.

“While product numbers have moved upwards for high LTV borrowers, compared to those available at 75% LTV, they are but a drop in the ocean.

“It means that, not only do first-timers have to save a significant deposit in order to find more product options but they might not meet the affordability criteria even if they have a 5% deposit – because the monthly mortgage cost is that much more.”