Latest polling data from YouGov shows that 48 per cent of the UK population think re-introducing 100 per cent mortgages is a good idea.
The research, which polled the views of 9,713 British adults, asked whether mortgages that don’t require a deposit because banks lend borrowers the entire cost of a home where a good idea, a bad idea, or if they didn’t know.
While almost half of those polled believed this category of mortgage to be a good idea, 32 per cent said that it was a bad idea, with a not-insignificant 20 per cent saying that they don’t know.
With the different age brackets, the variance in those thinking it a good idea ranged from 46 per cent of those aged 18-24 responding positively, to 49 per cent of those aged 65 and over.
Starker discrepancies can be found among those thinking it a bad idea, of which 22 per cent in the 18-24 age bracket agreed, versus 37 per cent aged 65 and over.
Broken down regionally, 51 per cent of people asked in Scotland said it was a good idea, while the region with the lowest enthusiasts was in London, at 45 per cent.
The poll also shows that females were more likely to be a proponent of 100 per cent mortgages, with 52 per cent thinking they are a good idea versus 44 per cent of males and, politically, 52 per cent of labour voters were keen, while conservatives clocked the lowest amount, at 46 per cent.
Some lenders already offer 100 per cent mortgages, although these either insist on having a parent act as a guarantor or that they put some of their own money into a ring-fenced account to act as security.
For example, Marsden Building Society’s Family Step mortgages lends at 100 per cent LTV mortgage, albeit with 20 per cent security from family through savings or property.
Earlier this month, the Building Societies Association recommended building societies and lenders “revisit the case” for 100 per cent loan-to-value mortgages, in addressing the role of intergenerational lending in the mortgage market.
Legal & General Mortgage Club head of lender relationships Danny Belton comments: “The thinking and rationale behind the return of 100 per cent LTV mortgages is interesting, but this is not the solution to the current issues facing first time buyers.
“At the very least it would mean lenders would have to significantly increase the amount of capital they would be required to hold, which is just not sustainable. What would be more beneficial is for more buyers to utilise schemes such as shared ownership and Help to Buy, or even make use of a guarantor mortgages.”