Mortgage lenders came under a two-pronged attack yesterday, as the Government and the building industry demanded they do more to kick-start the property market. But lenders pointed out that the schemes called for were already available.
The Housing minister, Grant Shapps, said lenders should offer "mates mortgages" to allow first-time buyers to club together to buy a home. Meanwhile, the housebuilder Persimmon blamed lenders for holding back recovery in the housing market by demanding too high deposits.
The builder sold 4.7 per cent fewer homes in the first six months of the year – with 4,439 homes completed so far – prompting its chief executive, Mike Farley, to call for more 95 per cent loan-to-value mortgages. He said: "People have been used to finding a 5 per cent deposit. We're just trying to get back to the status quo situation."
But Clydesdale and Yorkshire Banks is a major lender already offering 95 per cent deals. Its retail director, Steve Reid, said the Australian-owned banking group could give loans to borrowers with just 5 per cent deposit because of its "prudent decision-making process".
Meanwhile, Mr Schapps said his "mates mortgage" proposal was the answer to the problem of raising a large individual deposit. He said: "If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit on their own, there should be straightforward options to unite with their friends."
In fact, since 2004 the Britannia – part of the Co-op – has offered its Share to Buy scheme, which will take up to four incomes into account.