100% mortgages gaining popularity

The number of people taking out 100 per cent mortgages has doubled in the last year, according to the Mortgage Advice Bureau.

Such a mortgage is said to be most popular among first time buyers and the increased uptake is illustrative of the difficulty buyers are having affording homes as prices continue to rise.

This is also a difficult time to be borrowing more, as lending criteria are becoming more strict and the interest charged is increasing on mortgages offered by a great deal of providers.

Taking on a 100 per cent mortgage is no easy feat, with most charging in excess of one per cent more than standard mortgages.

Brian Murphy, head of lending at the Mortgage Advice Bureau, said: "The need for 100 per cent LTV mortgages has never been more apparent than over the past year.

"However, with current climate conditions and the initial signs of house price stabilisation, there might be a glimmer of hope for these buyers."