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Advisers have welcomed changes made by Leeds Building Society to its high loan-to-value product in a bid to help first-time buyers.

The society made a 0.4 per cent rate reduction on its 95 per cent loan-to-value mortgage.

The no-fee, 2.84 per cent two-year fixed rate mortgage comes with a free standard valuation, and a 1.25 per cent discount at the end of the fixed-rate period, for a further three years.

Matt Bartle, director of products at Leeds Building Society, said: “Our 95 per cent LTV mortgage has been designed with first-time buyers in mind, and this latest rate reduction will be very appealing to those looking to get onto the property ladder this year.

“With no completion fee, and free valuation as standard, we’re helping to keep costs down.

“We understand the importance of affordable housing, which is why we’re always looking for ways to help buyers with smaller deposits, alongside Help to Buy and Shared Ownership mortgages, which complement our range of deals at higher LTVs.”

Advisers called the building society’s mortgage rate changes “one to watch” and welcomed the move, although expressed caution in the uncertain economic environment.

Adam Hosker, founder of Bespoke Finance, said: “Leeds Building Society is always one to watch. A high street lender that is innovating on a solid product foundation. With further movements expected, the team is always eager to read Leeds’ updates.”

Martin Stewart, founder of London Money, commented: “It is a good rate and will get Leeds very close to the top of the best buy tables. Lenders are always tweaking their rates and sometimes they are up and other times down.

“We are still in a very benign interest rate environment so changes either way are often minuscule. It’s one thing having cheap money though and another thing altogether being able to borrow it.

“I have always been wary of high LTV products and even more so in the current environment where the Boris bounce could easily become a dead cat one overnight.”

Sebastian Reimann, mortgage, protection and equity release adviser for Libra Financial, agreed. He said: “This is great news although I see little demand for high LTV products. The sweet spot is probably at around 85 per cent LTV now, although I appreciate that’s not an option for everyone.”

By Simoney Kyriakou

Source: FT Adviser

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