HSBC is to offer £1bn of new mortgages to borrowers with deposits of 10% or more of the value of their properties, prompting speculation that the logjam at this end of the home loan sector may finally be easing.

The bank will next week launch a range of variable, fixed and tracker rate mortgages to borrowers looking for mortgages with loan-to-value ratios of up to 90%. It is the first major lender to allocate sizeable sums to this end of the market for more than a year.

Home loan providers nervous about falling house prices and the deteriorating economic environment have until now required new borrowers to come up with much larger deposits, which has caused first-time buyers in particular great difficulty.

The Independent