Graph of The Week: 25 Per Cent Deposit Provides Most Mortgage Choice

Here’s a handy visual representation of figures recently published by Moneyextra.com about mortgage availability.

It shows that in the first quarter of 2009 people with a 25 per cent deposit had access to the largest number of mortgage products: 797.

In Q1 2008 there were still plenty of deals at 90 per cent LTV (401) but this had plummeted to a mere 67 by Q1 2009.

It will be interesting to see if the Budget announcement on mortgage backed securitisation produces a shift in loan-to-value ratios – high deposits are currently a big obstacle for many buyers.

However, not everyone believes this is the key to a market recovery – David Lawrenson over at Letting Focus recently argued that many people overestimate the impact of mortgage access on the future direction of house prices.

Why? Because, in his own words:

“Over 40 per cent of people have no mortgage so don’t give a stuff about mortgage rates; and if they are not buying for themselves they will be giving their lucky offspring at least some of the money for a deposit and for the hefty mortgage fees which are now the norm.”

That’s a fair point, and well made. But let’s hope LTV levels do improve so that all those people who can’t make a withdrawal from the Bank of Mum & Dad get a chance to buy a place of their own.

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• Graph Of Week: Rising Prices Creating Sellers’ Market (0)
• Graph Of The Week: Winners & Losers In 2009 (1)
• Graph Of The Week: When Will The Housing Market Bottom Out? (3)
• Graph of The Week: What’s Happening To Rents? (0)