PM Johnson’s pledge for London first-time buyers is welcomed

PM Johnson’s pledge for London first-time buyers is welcomed

Boris Johnson’s pledge to encourage more high loan-to-value (LTV) mortgages to the market has been welcomed by Ellis & Co’s preferred mortgage partner.


However, Connect Mortgages added “the devil will be in the detail”.


The Prime Minister told the virtual Conservative Party conference this week: "We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95% of the value of the home - vastly reducing the size of the deposit and giving the chance of home ownership - and all the joy and pride that goes with it - to millions that feel excluded.


"We believe that this policy could create two million more owner-occupiers - the biggest expansion of home ownership since the 1980s.


"We will help turn generation rent into generation buy."


Many first-time buyers in London have found their options limited, with lenders withdrawing many high LTV products from the market after the coronavirus lockdown was eased.


Connect Mortgages’ Liz Syms said: “Since the lockdown, there has been a clear lack of high LTV mortgage products restricting the options for first-time buyers.


“The market has relied on lenders issuing limited tranches of products or offerings that involve family guarantees. Insurance-backed schemes that were intimated in the speech are not new.


“Those who have been in the mortgage market for some time will remember 'indemnity insurance' which provided security for lenders against the risk of default when offering a high LTV, but the applicants had to pay the cost of the insurance.


“Any initiatives that enable lenders to become comfortable again lending up to 95% will be very welcome, but we look forward to seeing the detail!”