A loss of momentum in house price growth does not appear to have dented banks' confidence in the property market.
The Daily Telegraph says that high street lenders are "defying fears that they would cancel support for first-time buyers and scrap mortgages for those with only a small savings pot".
There had been growing concern that an expected hit to house prices caused by the Brexit vote would lead banks to cancel 95 per cent loans for people with the smallest deposits.
But data from the mortgage insurer AmTrust and the comparison service Moneyfacts shows that there are still 238 mortgages on offer for those with just a five per cent deposit compared to 249 before the referendum, reports City AM.
The Telegraph adds that interest rates on those loans remain close to record lows, at an average of 3.9 per cent last month.
This is a fraction above the 3.86 per cent average in June, but lower than any other previous month and down from 5.28 per cent last year.
With an equity buffer of just five percent, these buyers are more at risk of falling into negative equity. If they run into difficulty, the bank would be unlikely to recover their investment if it was forced to sell the property on.
During the 2008 crash, 95 per cent mortgages almost completely dried up, but this time around banks are in a better position and surveys suggest price growth is slowing but still positive.
It also helps that many of these loans are currently backed by the government's Help to Buy guarantee, which covers much of any potential bank loss on the loan.
"Apart from pockets of London, the market will grow less quickly as opposed to turning negative. That is healthy," says Jeremy Duncombe, director of Legal & General's Mortgage Club.
Duncombe believes that house prices are being held up by weak supply, which remains below demand despite the lower-transaction market since the Brexit vote.
While the availability of cheap finance for low deposits is helpful, prices that are already record high are still rising and this is putting pressure on first-time buyers, who are already struggling after years of sluggish wage growth.
"The early indications are that Brexit has not prevented the upward march of house prices for first-time buyers," says Simon Crone, commercial director of AmTrust.
"This suggests that Brexit may not be as good for first-time buyers as initially thought."
Reference: http://www.theweek.co.uk/house-prices/61987/house-price-strength-keeps-95-loans-on-the-table
Image: http://www.theweek.co.uk/house-prices/61987/house-price-strength-keeps-95-loans-on-the-table