"This is a step in the right direction although, unfortunately, it is only available to existing borrowers looking to move home. As such its effect on the housing market at large will be minimal.
"The return of the 95 per cent mortgage is an encouraging sign for those with a steady income and good credit record, but without a large savings pot. I hope we will soon see an extension of this to first-time buyers, as many people are struggling to get on the housing ladder due to the demand for larger deposits.
"However, the dangers of high loan to value mortgages remain. With projections of further falls in house prices, a 95 per cent mortgage could easily land borrowers in negative equity. As such those looking for high LTV mortgages must go into these deals with their eyes open and be comfortable with the idea of potentially living in negative equity."
