Taylor Wimpey offers 95 per cent mortgages

Taylor Wimpey has become the latest housebuilder to team up with mortgage lenders to offer a high loan-to-value mortgage to first-time buyers – in the same week that the lack of finance was addressed by an industry summit hosted by Grant Shapps, the housing minister.

The summit brought together mortgage lenders, housebuilders and other industry groups to explore ways to help first-time buyers back on to the property ladder in today’s difficult lending conditions.

Areas under discussion included mortgage insurance, shared ownership and other product innovation.

Some lenders and housebuilders have used the debate to launch new products. Taylor Wimpey has joined with two building societies – Saffron Building Society and Melton Mowbray Building Society –to offer first-time buyers a 95 per cent loan-to-value mortgage on some of its developments in the East Midlands, East London and East Anglia.

The scheme provides buyers with the option of a two-year mortgage fixed at 5.49 per cent from Melton Mowbray, or 5.99 per cent from Saffron Building Society.

Bovis Homes and Barclays launched a similar first-time buyer scheme last June. The bank offers 90 per cent mortgages to people who buy a property from Bovis Homes, with the housebuilder covering the cost of an insurance-backed product to mitigate the risk for the lender.

The Bovis/Barclays deal is also fixed for two years at 4.99 per cent, which reverts to a tracker rate of 2.49 per cent above the base rate.

Melanie Bien of Private Finance, the mortgage broker, says the Taylor Wimpey scheme is attractive for those who only have a 5 per cent deposit. However, she warns that a two-year fix could be an area of concern. “With the housing market so volatile and interest rates forecast to start rising in coming months, a five-year fix would have given more certainty for a longer period of time.”