As many as 90,000 new build homes are sat empty due to low loan to value (LTV) ratios from mortgage lenders making it difficult for prospective buyers to build deposits, according to research undertaken by Atelier.
The latest figures from Halifax show the average UK house price is now £281,974 and with standard LTV ratios of 75%, buyers have to put down a deposit of £70,493. Atelier is calling on mortgage lenders to increase their LTV ratios to attract more first buyers.
Chris Gardner, joint CEO at Atelier, said: “The residential property market has always been an essential driver of the UK economy. So why are there are still so many barriers for first-time buyers trying to get on the ladder? Hard-working individuals who cannot bridge the deposit gap are left at the mercy of the rental market, adding further fuel to the current rental crisis and depriving individuals of home ownership.
“For all of the talk of a restrictive planning system stifling the property market, the real culprit is in fact restrictive mortgage LTVs. As long as they remain low, the pool of property purchasers will be limited. The solution is simple but we cannot wait for the government to act. Higher LTVs from mortgage lenders would quickly place empty new-build properties into the hands of those they were originally built for and unlock the current market stasis.”
