Yorkshire Building Society have unveiled a number of new mortgage products which requires the borrower to put down only a 5% deposit. It describes its new range of 95% loan-to-value mortgages as, "a return to traditional lending".
The 36 products are outside the government's Help to Buy scheme and some offer lower rates - Andy Caton from Yorkshire Building Society told BBC News they were "good value" because they did not pay dividends to share holders.
"There is more optimism," he continued, "We've got 5% house price inflation - that's not too giddy... but housing transactions are still below trend, so we're a long way from calling a boom here."
Andy Caton, Yorkshire Building Society: "This is really a return to traditional lending to be honest. Pre-crisis, 95% loan-to-value mortgages were very much the norm and building societies in particular have been providers of mortgages to first-time buyers. We've done a lot of research and 88% of the people we surveyed said they had problems trying to raise a 10 per cent deposit and there's a real market need here so we've got 36 different types of 95% loan-to-value mortgages being released today, hopefully covering all borrower needs and hopefully contributing to the housing market."
BBC News: "Now what makes these mortgages different from those you would be able to get under a Help to Buy scheme? Of course with this catch-all title, the government guarantees a proportion of that, so as a lender you are less at risk, but what is different for a customer?"
Andy Caton, Yorkshire Building Society: "Very little. I would make the argument that our mortgages are very good value because we're not paying that fee to government but we very much support what the Help to Buy scheme is trying to achieve. But because we're not paying that fee and because we're a mutual lender who doesn't pay dividends to external shareholders we can reflect that in good value products."
BBC News: "We've also had figures from the Council of Mortgage Lenders within the last hour suggesting that mortgage lending is at its highest rate for five years. Is that something that you recognise from the people that you speak to on a day to day basis? There's more optimism in the market?"
Andy Caton, Yorkshire Building Society responded by saying: "Yes there is more optimism. We've got 5 per cent or thereabouts house price inflation and that's not too giddy - it doesn't look like a boom to me. There's similar expectations for next year but housing transactions, the real movememt in the market, are still below trend so we're a long, long way from calling a boom here."