Genworth has revealed that its client, Monmouthshire Building Society, has significantly upped the number of first-time buyer loans it is offering to borrowers through its use of private mortgage insurance.
Genworth has collated the level of first-time buyer loan activity at the Monmouthshire throughout the first six months of 2015 and it reveals a significant 18% increase in first-time buyer loans over the same period in 2014.
Breaking the year down into quarterly activity, Monmouthshire Building Society’s first-timer buyer loan numbers were 26% up in quarter one 2015 on the same three-month period the year previously, while figures for quarter two were close to 10% up on quarter two 2014.
The Society supports first-time buyers through a range of low-deposit mortgages between 90 and 95% loan-to-value. It currently offers two-year fixed and discount rates up to 95% LTV for house purchases.
It is able to do this via its use of Genworth’s private mortgage insurance products which allow it to offer these types of mortgages whilst at the same time insuring itself against any increased risk that might come from this borrower segment. The Society also takes part in the Help to Buy – Wales scheme.
Genworth says the building society sector continues to be at the forefront of the provision of these low-deposit mortgages because it has an appetite to help these types of borrowers and it is willing to use private mortgage insurance in order to support its lending activities and mitigate against any potential risk.
Patrick Bamford, business development director for mortgage insurance Europe at Genworth, said: “Our building society clients, such as the Monmouthshire Building Society, are leading the way when it comes to supplying first-time buyers with the low deposit mortgages they need in order to secure a place on the housing ladder. A lack of new housing supply means that prices remain high, and are likely to do so well into the future, which is why borrowers with small deposits need lenders willing and able to offer low deposit products in this sector.
“By utilising private mortgage insurance, building societies are not just sustaining the first-time buyer community but, as Monmouthshire’s loan figures show, are increasing their activity levels at a time when many lenders are moving in the opposite direction. The Government’s Help to Buy Scheme has certainly helped but there needs to be a focus on the long-term use of private insurance, especially when we know that Help to Buy 2 is going to finish at the end of next year.
“Without societies like the Monmouthshire we are looking at a post-Help to Buy 2 drop off in low deposit mortgages; indeed they could fall to pre-Help to Buy levels, if the Government is not proactive in putting an appropriate exit strategy in place. The Government could, for example, actively support a full transition to the private mortgage insurance sector which has sufficient capacity to support lenders who wish to offer these types of products and it could put in place the foundations to allow first-time buyers access to the low deposit mortgages they so desperately need in order to secure that first home.”
Colin Strong, head of lending procurement at Monmouthshire Building Society, said: “Monmouthshire Building Society is proud of the support it is able to offer first-time buyers who wish to pursue their dream of home ownership. The strength of our product range, allied to our award-wining recognition, affirm the Society’s position as a competitive, vibrant and approachable provider of mortgage loans.
“Our pledge to support first-time buyers is part of our long-term vision for the future of the Society and its position within the mortgage market.”
