Mortgages for borrowers who have a five per cent deposit have dropped month on month despite lenders bringing back swathes of other high loan to value (LTV) deals in May.
The number of 95 per cent LTV two-year fixed rate mortgages on the market fell from 11 in May to just six at the beginning of June, according to analysis by Moneyfacts.
Five-year deals in this bracket are just as scarce falling by two so that just nine products in this category remain available to buyers.
However, one step down the risk curve at 90 per cent LTV the situation is improving notably.
The number of 90 per cent LTV deals available to buyers looking for a two-year fix shot up by 31 products month on month from 24 to 55. Five-year fixes in this bracket doubled from 25 to 51 in June.
In the 85 per cent LTV bracket, the availability of two-year fixed rates increased by 29 from 87 in May to 116 in June. Five-year fixed rates increased by 33 deals, also bringing the total number of deals to 116.
Moneyfacts spokeswoman Rachel Springall said: “Borrowers may need to wait a little longer for providers to accommodate them if they only have a five per cent deposit to buy their first home, as there has been no improvement to growth in the choice of deals available to them over the past month, it has in fact shrunk.
“As lockdown eases, individuals return to work and attempt to discover normality again they may well be starting to house hunt.
“However, it may be a bit premature for them to buy a home imminently and instead they may wish to wait for more competition to return to the mortgage market for low deposit deals.”
Samantha Partington is a freelance trade and consumer journalist writing about property and personal finance. Previously she worked worked for the Daily Mail and Property Week. She is the former deputy editor of Mortgage Solutions and editor of Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and latterly for a mortgage, bridging and secured loan lender. Samantha is CeMAP qualified. Follow her on Twitter @SamJPartington1.