Boost for first time buyers

Commenting on HSBC's announcement of further lending to first time buyers, Hannah-Mercedes Skenfield, mortgage spokesperson at moneysupermarket.com, said; "HSBC's commitment to further lending to first time buyers is an indication of its belief in this part of the market. Throughout the credit crunch HSBC has been one of the most visible players in the mortgage market, offering a range of market leading rates when others were shying away from lending altogether.

"The last year has seen lenders place far too much emphasis on equity over affordability, and so it is encouraging to see HSBC grow its 90 per cent LTV lending book. Our data shows that HSBC is currently the cheapest 90 per cent LTV lender in the market - though its fee is larger than most of the competition, so it is not surprising they've already leant £1bn at 90 per cent LTV so far this year.

"This kind of positive news is crucial as the mortgage market enters a critical phase. With the Bank of England figures showing a decrease of mortgage approvals in August, it is clear that the recovery of the housing market is by no means a foregone conclusion. The main issue continues to be supply rather than demand, with too few lenders opening the purse strings at a reasonable rate.

"With the Base Rate still at 0.5 per cent and LIBOR hovering around the same mark, one might expect lenders to be offering better deals for first time buyers, but they just don't seem willing."