Loan to value goes up

Low loan to value ratios has been one of the major factors responsible for the slowdown of the housing market over the past few years, in particular for the first-time buyers.

After the credit crunch lenders started to exhibit extreme caution when it came to giving loans to anyone and consequently, a large number of potential buyers found it impossible to enter the home owner loan market, simply because they couldn’t put down a large enough deposit.

However, it has been revealed by the National Mortgage Index that there has been a steadfast increase in the average loan to value over the twelve-month period up to now, with July average reaching as high as 71.1% for the first time in several months.

The increase is substantial because in June the average loan to value constituted just 67.5%, which is encouraging for those buyers who were priced out of the market because they didn’t have sufficient deposit.

As for the average amount of a mortgage, it has seen an increase as well, from £130,609 in June, to £139,404 in July, which is the highest figure since 2007.

Brian Murphy of Mortgage Advice Bureau said that the increase in average loan to values registered in July proved that the competition on the mortgage market was growing. Nevertheless, average loan to values vary significantly depending on the region, with average loan to values going up in three regions and going down in seven regions.


The cultural transformations that have made people accept life in debt have had a direct impact on the approach youngsters take to money matters, which could lead to negative consequences in the long run as many of the next generation would resort to IVAs to cope with serious financial issues.

When we put efforts into our work and get paid for this, we get an amazing feeling of satisfaction. Our hard hard work seems to have been remunerated financially. We go shopping and buy the items we need and the items we simply want.