Yorkshire Building Society will be the first lender to relaunch 95% mortgages.

This will only be available to first-time buyers.

The Yorkshire Building Society will become the first lender to relaunch 95% mortgages in the mainstream market, nearly a year after the pandemic scared lenders into withdrawing low-deposit mortgages.

However, the deal will only be available to first-time buyers and the company will apply strict conditions on loans, including the exclusion of newly built apartments and houses.

The recent budget brought news of a government guarantee scheme to encourage banks and credit unions to return to the low-deposit mortgage market, in a move that, according to the chancellor, was designed to help generate income rise make it a “generation buy”.

Although the company does not plan to use the scheme, it said it would not have returned to the market without it, due to anticipated demand from prospective owners.

Last year, along with the handful of other lenders operating in the 90% mortgage market, he was forced to place restrictions on applications to manage demand, and on several occasions he offered the loans for just two days in a row.

More lenders are expected to join this initiative.

The 95% Yorkshire deal, which will be offered through mortgage brokers, will have a fixed rate of 3.99% for five years and comes with a £ 995 fee.

Yorkshire Building Society Chief Executive Mike Regnier said he was confident the lender could take the risk himself, without resorting to government money.

But he said he would not have reintroduced his own low-deposit mortgage unless he knew other major banks were about to join the 95% market through the government scheme.

“As the only lender in this market, we would have a difficult time meeting the demand that clearly exists for clients who have saved for years to get a 5% deposit and will want to take full advantage of the stamp duty land tax holiday,” Regnier said.

The society has more than 200 subscribers ready for launch.

Mortgages will not be available to borrowers hoping to buy newly built flats or houses, who may be more vulnerable to price drops during economic downturns.

It does not plan to restrict requests to certain days or time slots, but its strict criteria, which also exclude workers without permission, are intended to reduce demand.

“We are trying to restrict, to some extent, the amount of demand we get from it in order to manage our service levels. We have done it very deliberately,” Regnier said.

The COVID-19 pandemic prompted most lenders to withdraw their 95% mortgages last spring. Currently, there are only five 95% loan-to-value (LTV) mortgage products available compared to 391 in March 2020, and those are specialty offerings, according to financial data provider Moneyfacts.

HICH LTD has revolutionized the property survey market since day one! Are you looking for a roof, structural, or bespoke survey? Request it here!

Follow us on our social networks to keep up to date with the most relevant property market news, tips for being a responsible homeowner, and much more!

Twitter: @HichLTD

Facebook: HICH-LTD