We'll help 60,000 buy their first home, says Lloyds

Lloyds Banking Group (LSE: LLOY.L - news) has said it will lend £6.5bn to customers looking to buy their first property this year.

The bank which runs the Halifax, Lloyds TSB and Bank of Scotland brands said this should help 60,000 people get on the property ladder, a 20pc increase in the number of first-time buyers it lent to last year.

However, while it made this pledge today it has neither increased the number of mortgage deals available to those with small deposits, nor reduced the rates on the mortgages that are currently available to first-time buyers.

The bank has said its "core range" of mortgage deals will be available to those with just a 10pc deposit . But this is already the case, and like most other banks Lloyds will reduce the price of its best fixed-rate and tracker deals for those who have significantly larger deposits, or more equity in their homes.

However, Lloyds said it continued to provide an "unrivalled commitment to affordable housing" and "innovative new products" which would enable those with just 5pc deposits to get on the housing ladder.

The bank is one of the biggest supporters of the Government's NewBuy scheme, which allows first-time buyers to purchase certain newbuild properties with only a small deposit. A total of 42 housebuilders have now signed up to this scheme, and Halifax last year provided 40pc of the NewBuy mortgage deals.

Lloyds TSB will also continue to offer its Lend a Hand mortgage scheme, which allows first-time buyers to get a mortgage with just a 5pc deposit, provided that their parents can deposit a further 20pc in a linked savings account. This money remains in the parents' name and can be accessed at a later date.

The bank also providers a third of the mortgage lending for affordable housing schemes run by many local authorities.

David Hollingworth of London & Country mortgage brokers said: "It is good to see major banking like Halifax and Lloyds confirming their commitment for providing mortgages for customers with just a 10pc deposit. They offer awide selection of mortgages at this loan to value, though none are troubling the best-buy rates."

He said Lloyds currently offers a two-year fixed-rate deal at 4.99pc for those with just a 10pc deposit. However, those with the same deposit can get a two-year fix for just 3.79pc from the Yorkshire Building Society.

Stephen Noakes, the mortgage director at Lloyds Banking Group, said: "Our range of products is continuing to make home ownership a reality for so many first-time buyers.

"The recovery in the housing market rests on growth in the wider economy. While the property market is likely to continue to be challenging, we remain committed to getting things right at the start of the chain, creating liquidity in the housing market and helping more people get on to the property ladder in 2013."

The bank has used the Government's flagship Funding for Lending scheme to help provide such mortgage deals. It was the first bank to access this scheme in September last year, and to date has drawn more than £3bn from it.

However, the scheme has been widely criticised for simply reducing the cost of mortgages for those with plenty of equity in their home and for driving down savings rates by a greater margin.

Jonathan Harris of mortgage broker Anderson Harris added: "The fact that Lloyds and Halifax are offering a wide range of 90pc deals is excellent news, and should mean many more first-time buyers can finally make their dreams a reality."

He said those with smaller deposits will still struggle to find affordable mortgages. But added: "If you have less than this you should really be saving for longer and delaying purchase until it is more affordable. A 10pc deposit should be within the reach of most first-time buyers."

Other lenders have also begun to target the first-time buyer market. Last week, Barclays announced the launch of a new innovative "family mortgage" deal t hat allows parents to use their savings to help their children get on the housing ladder.

Watch the Telegraph video series on how to buy a first home.