Ahead of Boris Johnson’s keynote speech, where he is set to announce measures to assist first-time buyers, Matthew Addison, chief executive and co-founder of StepLadder believes FTBs deserve their own fenced-off mortgage category.

Boris Johnson intends to allow more prospective homeowners onto the property ladder by offering lower deposits to assist with affordability.

As uncovered yesterday, 5 October, the Prime Minister has asked other ministers to work on plans to allow more mortgages to be offered at a 95% LTV.

second charge

Bankrate UK: Generation Buy is welcome but other factors are at play

Outlined in the new proposals, banks would be encouraged to ignore an applicant’s finer details such as earnings and outgoings, with the intention to increase the number of accepted loans to 95%.

In addition, the government would accept some of the loan risk in the form of a state guarantee.

StepLadder aims to assist FTBs by using an innovative alternative finance model, which draws upon the power of collaboration, known academically as a ROSCA.

According to the firm, 87% of its users are able to raise their deposits faster using this approach over traditional methods.

Addison said: “Widespread and far-reaching economic uncertainty has resulted in meaningful additional caution from mortgage lenders.

“Some have even suspended FTB lending altogether. This apprehension is a further sign that FTBs deserve their own fenced-off mortgage category for lenders who could offer FTBs longer-term, fixed-rate loans.

“Alongside today’s news, FTBs continue to be asked for a prohibitive deposit. Innovation around raising a bigger deposit is crucial.

“It is imperative that FTBs do their own research and have a solid understanding of their own mortgage affordability and the most suitable support available to them. There are many options out there so education is key.”