A new report from the Bank of England has shown a “significant” increase the availability of mortgages to borrowers with a deposit of less than 25pc in the third quarter.
“UK banks have elevated the risk assessment strategy in respect to active lending. Those who fit into lower risk categories are securing finance more” said Mr. Frank Conway of the Irish Financial Review.
Read full report HERE
However, the availability of mortgages for those with a deposit of less than 10pc was “little changed”, according to the Bank of England’s quarterly report.
Increased demand for mortgages
There was a significant increase in demand for mortgages in the third quarter, lenders reported, driven in part by the Bank of England’s Funding for Lending Scheme.
The Funding for Lending Scheme was designed to make cheap credit available to lenders on the condition they pass on the money and low rates to households and businesses. It has been credited with a fall in mortgage rates which has boosted demand.
Demand is expected to rise further in the last three months of the year, lenders said, as consumers continue to feel more confident about the economy as house prices pick up.
The Bank’s findings were published in the same week that the second phase of the Government’s flagship Help to Buy scheme was launched, which sees major lenders offering state-backed mortgages to people with deposits as low as 5pc.