Jon Cooper, head of mortgage distribution at Aldermore, highlights the success of our recent 90% LTV trial. We plan to re-enter this crucial sector, which has faced significant challenges in recent years.

Brokers struggled throughout 2020 when helping clients secure high LTV (Loan-to-Value) products. During the pandemic, the market saw limited options as lenders focused on managing risks, balancing volumes, and maintaining service levels. Since March, the availability of 90% LTV mortgages has declined sharply. Few lenders now offer these products, and restrictions often apply to specific areas.

Understanding the difficulties brokers face, Aldermore has taken steps to support them. We are committed to re-entering the high LTV market with a focus on responsible lending and service excellence. Managing risk remains a priority while we aim to provide effective solutions for brokers.

Our recent trials of two 90% LTV products produced positive results. The feedback and uptake were strong, highlighting a clear demand for increased product choice in this area. As a result, we aim to address existing gaps and widen the scope of high LTV mortgage options.

By offering these products, Aldermore empowers brokers to better serve clients seeking high LTV solutions. A broader range of mortgage products benefits brokers and homebuyers alike, creating a stronger market for all involved.

Our focus remains on enhancing choice, maintaining high standards, and supporting brokers in a challenging lending environment. With this approach, Aldermore continues to make a positive impact on the mortgage industry. By providing innovative solutions, we aim to strengthen broker confidence and assist more clients with achieving their homeownership goals.

We talk mortgages | What we did

In early November, we launched two temporary fixed-rate mortgages with a 90% loan-to-value (LTV) ratio. These were available exclusively through brokers. The products included a two-year and a five-year fixed-rate option. These options were for those with a maximum loan-to-income ratio of 5.5 times.

We designed these mortgages to meet the expected rise in demand. This was particularly true for first-time buyers and other borrowers. They aimed to complete purchases before the Stamp Duty holiday ended in March 2021.

As leaders in reintroducing 90% LTV mortgages, we mainly aimed to assist brokers in securing client funding. This initiative also served as a trial, providing insights into customer preferences for high LTV products. These insights helped us refine our strategy.

The response to our 90% LTV products exceeded expectations and was very popular among brokers. The trial period taught us valuable lessons. We have carefully analysed our experiences with 90% lending, which will guide our future strategies in this sector.

Our dedication to understanding and meeting our clients’ evolving needs remains strong.

We talk mortgages | What we learned

We received overwhelmingly positive feedback from brokers. Our mortgage products remained in high demand among a wide range of clients.

Regional Performance Highlights

Strong business volumes were evident across northern England, Wales, and Scotland. However, activity in London and the South East was noticeably slower in comparison.

High-Quality Applications for New-Build Properties

A significant proportion of applications focused on new-build properties. Importantly, the quality of these applications was exceptionally high.

Conversion Rates and Purchase Focus

Conversion rates from applications to offers reached impressive levels. Notably, every case we processed involved purchases, despite remortgage deals being available.

Product Preferences and Fixed Rates

Three-quarters of applicants opted for our two-year fixed product. Meanwhile, the remaining quarter preferred the medium-term stability of our five-year fixed rate.

First-Time Buyers Lead Applications

Interestingly, first-time buyers accounted for 77% of applications. In contrast, only 23% of applicants were home movers.

Overall, the UK mortgage market continues to show robust demand, particularly for new-build properties and fixed-rate products. Brokers and clients alike value the reliability and quality of these offerings.

We talk mortgages | What’s next?

We understand the increasing demand among expert mortgage brokers  for higher Loan-to-Value (LTV) options. As part of our ongoing commitment, we are preparing to re-enter the 90% LTV market for the long term. Our recent trial, conducted last month, provided valuable insights that are shaping our high LTV lending strategy.

Currently, we continue to offer 85% LTV products with borrowing up to 5.5 times income. At the same time, we are reviewing our lending criteria to reflect changing market conditions. This includes assessing business volumes and ensuring we maintain service levels that meet your expectations.

Re-entering the 90% LTV Market for the Long Term

Aldermore’s flexible underwriting approach focuses on individual circumstances. This allows us to explore suitable approval opportunities wherever possible. We recognise the urgent need for additional 90% LTV solutions for your clients. For this reason, we remain committed to re-entering the 90% LTV space soon.

We aim to support brokers with a broad range of mortgage options. Our approach adapts to the ever-changing lending landscape while addressing the evolving needs of brokers and their clients.

With our tailored lending solutions and forward-thinking strategy, we will continue to prioritise your success in the mortgage market. By doing so, we ensure brokers can access the tools they need to serve clients effectively.

Thank you for reading our publication “We Talk Mortgages | How Aldermore Supports High LTV Clients.” Stay “Connect“-ed for more updates soon!