This is according to Quilter Financial Planning which has unearthed figures revealing there were 37% fewer 90% to 95% loan to value (LTV) mortgage sales in 2020 compared to the average number in the three preceding years.

It put in a Freedom of Information (FOI) request to the Financial Conduct Authority (FCA) and discovered from January to September 2020 there were 52,527 mortgage sales in the 90% to 95% LTV band. In the same months of 2017, 2018 and 2019 the average sales were 74,500.

Quilter said, even taking into account the fact the lockdown had hit house sale numbers, these figures still showed buyers looking to get high LTV mortgages deals were ‘disproportionately’ impacted by the lack of options.

Indeed, when looking at the figures following the introduction of the stamp duty holiday – which revived the market – the FOI request revealed there were just 4,456 90% to 95% LTV sales in August 2020 compared to 11,535 in the same month in 2019.

Gemma Harle, managing director of Quilter Financial Planning said: “These figures illustrate how difficult 2020 has been for the first-time buyer market who typically require higher loan to value deals.

“Since the introduction of the stamp duty holiday, many mortgage brokers will tell you that they have never been busier.

“However, the holiday has done little for first-time buyers who were paying little to no stamp duty anyway but have had the rug pulled out from beneath them as lenders exited the high LTV market meaning they needed a bigger deposit to get a foot on the housing ladder.”

Buy-to-let investor competition

During the summer months the lack of 90% deals coupled with the fact the housing market was ‘rampant’ meant first-time buyers were competing in a market with increased numbers of buy-to-let investors who may well have had more equity, Harle said.

She said these investors would have been more able to outbid first-time buyers for housing stock and wold have seen their stamp duty costs slashed.

Harle added: “More needs to be done to help Generation Rent buy their first home. However, the next number of months may play into the hands of some first-time buyers as once the generous government support schemes to help keep people in employment and the stamp duty relief is cut it is likely that we will see a reduction in house prices making them more affordable.”