From 19 April buyers will be able to purchase properties worth up to £600,000 with just a 5% deposit, under a government guarantee scheme.

First time buyers and existing homeowners will be able to take advantage and a growing number of mortgage lenders have come forward to take part - most recently Halifax, which over the weekend revealed it will also launch a 95% deal.

Zoopla says greater availability of 95% mortgages will have the biggest benefits for buyers in lower value markets in northern England and Scotland. Richard Donnell, Zoopla’s research and insight director, says: “The scheme will have less impact for buyers in southern England where high house prices are a major barrier to being able to afford a 95% mortgage. This aligns to the levelling up narrative and policy approach of government.” 

According to Donnell’s research, mortgage lending at over 90% remains limited – just 4% of mortgages were over this level in Q3 2020, down from almost 7% in mid-2019. He added: “Most lending is capped at 4.5 times the borrower’s income. Borrowing at 95% loan to value generates a larger loan size, so in high value markets this may require a larger income than in lower value areas - hence the belief this measure is aimed at helping the North.”