It’s been a busy few weeks in the market. Several lenders relaunched higher loan-to-value mortgages but then we saw some of these options being withdrawn again within days in order to manage heightened demand from buyers.

Lenders can’t and shouldn’t compromise on service standards – and many of the lenders we work with were concerned that they couldn’t maintain service while meeting demand.

Despite the challenges facing lenders, the level of demand is certainly a positive. It’s a sign that buyers, including first-time buyers, are still eager to move ahead with their property purchase. But we are now beginning to see some of the ongoing challenges we face as a market due to Covid-19.

Lender support

There are still high LTV products available. We see lenders across the market that are still eager to lend at 90 per cent, including intermediary brands. Accord, for example, recently announced a return to 90 per cent for FTBs – and this week The Co-Operative’s Platform brand has relaunched it is 90 per cent offering. I am confident that we will continue to see more providers returning to this area of the market. However, the high street banks will be needed in this sector in order to meet demand. For many, the key obstacles preventing them from returning will be operational ones and a desire to ensure service levels remain high. I would urge these lenders to consider the vital role this market plays for first-time buyers and those with smaller deposits.

Alternative routes

We’re pleased to see advisers using their expertise to help hopeful FTBs and others find viable routes into homeownership while choice in the high LTV sector remains limited. At Legal & General Mortgage Club, our SmartrCriteria data has shown a significant uptick in searches for creative options. Adviser searches for joint borrower/sole proprietor mortgages jumped nearly three-fold between April and June, while searches for mortgages with gifted deposits (‘The Bank of Mum and Dad’) more than tripled. Products including family support mortgages, Help to Buy mortgages and Shared Ownership also remain available as routes for buyers onto the ladder. Advisers are drawing on their knowledge and experience to help clients make their housing plans a reality.

Navigating the uncertainty

There is still uncertainty about what the future holds. To try to understand the changes and new trends this crisis may have encouraged in the housing market, we have undertaken a new wave of consumer research looking at homeowners and FTBs before and after lockdown. Just some of the early findings we have seen from our survey show that a significant majority of FTBs are still considering or definitely want to move ahead with purchasing their first home this year, regardless of Covid-19. In fact, many of these buyers have even been able to save more during the crisis, avoiding commuting costs, for instance.

It’s a clear sign that demand for high LTV products will continue to be there, even after the market has worked through the current backlog of demand. One in five current homeowners still intends to move ahead with their plans to purchase a new home in 2020.

The data also shows that the new normal may not be so different from life before the pandemic. While more FTBs are now considering buying more rural areas than before, the research suggests that what buyers are actually looking for in their next property has remained largely unchanged.

Our aim at Legal & General Mortgage Club is to use this research to help our colleagues understand the changes we are seeing in the market and drive positive messages about the sector – and there is definitely plenty to be positive about.

And always, we want to emphasise the hugely valuable role advisers play for borrowers, guiding them towards the right options and now, more than ever, helping them to navigate the uncertain times we find ourselves in. So, watch this space.

Kevin Roberts, director, Legal & General Mortgage Club