The Help to Buy Mortgage Guarantee Scheme was designed to help lenders offer home buyers more
high loan-to-value mortgages (80-95%), backed by government support.
The Welsh Government and house builders were to act as guarantors so buyers could secure
high loan-to-value mortgages not otherwise be available to them.
It will lead to
high loan-to-value mortgages of up to 95% using guarantees from both housebuilders and the Welsh Government.
High loan-to-value mortgages require equally high credit scores/ratings which over recent years has resulted in many people being unable to get a mortgage or remortgage.
Lenders pushed out a spate of
high loan-to-value mortgages in the summer to cater for the backlogged first time buyer market, and, although they have taken time to feed through, we now are we beginning to see borrowers take them up in notable numbers.
The withdrawal next March of the stamp duty land tax holiday for firsttime buyers on purchases up to pounds 250,000, combined with the better availability of
high loan-to-value mortgages, could see a modest increase in first-time buyer purchases over the next three months, with a possible fall off later.
First-time buyers, often seen as the lifeblood of the market, have been hit especially hard as availability of
high loan-to-value mortgages has decreased in line with lenders' risk appetite and funding availability.
They added that this caution was being reinforced by the higher capital requirements needed for
high loan-to-value mortgages.
That's particularly true for home purchases, where low interest rates, tax deductions, and low-down payment products have made
high loan-to-value mortgages more appealing to consumers.
The demand for
high loan-to-value mortgages is on the rise.
