This was an improvement on the mortgages available to first-time buyers before the pandemic hit the property market. In February last year, 71 per cent of lenders were able to meet the borrowing needs of this segment.
Unsurprisingly, it was also up from a low in May when the effects of Covid-19 led to a restriction in product availability for first-time buyers. At this point just 59 per cent of lenders were able to fulfil first-timers’ needs.
The average maximum loan made available to those buying their first home also rose to £237,500 up from a record low of £230,555 in January.
Although fewer lenders were able to serve the requirements of first-time buyers a year ago, the maximum loan available was down compared to the average of £256,915 in February 2020.
Those remortgaging in February were given an average of £188,000, down from £192,065 the month before. The proportion of lenders able to meet their borrowing needs also dropped to 84 per cent from 86 per cent.
For home movers, the average maximum loan provided by lenders was £237,803, a marginal decline from £239,995 the previous month. The proportion of lenders willing to meet their loan requirements remained flat at 81 per cent compared to 82 per cent in January.
Tanya Toumadj (pictured), CEO at Mortgage Broker Tools, said: “First-time buyers have had reason to be cheerful in recent weeks and the launch of the mortgage guarantee scheme will open up new options for potential buyers who have only a small deposit.
“However, it’s important to remember that any buyers hoping to borrow 95 per cent loan to value (LTV) under the scheme will need to demonstrate that they can afford the loan and so the state of the affordability landscape will play a big role in the success of the initiative.”
She added: “This is something that we’ll be monitoring closely with the MBT Affordability Index over the coming months.”
