The study showed 54 per cent of the 208 brokers questioned expected FTBs with little or no deposit to benefit from a combined 100 per cent loan-to-value (LTV) mortgage and personal loan. One in five said the 100 per cent plus deal could help raise the overall value of a property, as it allowed buyers to invest the extra money in home improvements.
The research also highlighted that 58 per cent of brokers believed there would be an increase in the need for advice on 100 per cent plus LTV mortgage and personal loan market in the next two years.
There are currently only five providers that sell bundled mortgage and personal loan products, with A&L the latest to launch into the sector.
Jeremy Claridge, head of specialist mortgages at A&L, said: “When innovative products come onto the market, it’s important they actually fill a gap and help those who need it most. Rising interest rates and house prices mean FTBs need flexible products that will help them get onto the housing ladder.”
Darren Pescod, managing director of The Mortgage Broker Ltd, commented: “It’s a limited market, because it is generally for FTBs. I’m sure other lenders have looked at it, but they have to make sure they can make money from it, because it isn’t the largest market. It’s a good, innovative product and it’s been around a long time, but it all boils down to affordability.”
