Housebuilder Bovis Homes has agreed a deal with Barclays to guarantee mortgages bank taken out by their customers in a bid to offer 90% loan-to-value home loans, showing just how difficult it is to secure a mortgage for first time buyers.

The housebuilding company have joined forced with Barclays to offer the 90% loan-to-value mortgage and will guarantee mortgages taken out by customers, in a bid to raise the demand for new houses.

Bovis have agreed that they will put aside a percentage of the sale of one of their new houses, which will be used to cover the costs of any defaults – taking the financial risk away from Barclays. The money will be given to Barclays if there are any losses on the loan or if the house is repossessed due to problem with payments.

David Ritchie, the chief executive at Bovis, said: “Banks clearly are struggling to justify high loanto-value mortgages because of the capital they need to set aside.”

“There are plenty of people who simply cannot get a mortgage because they don’t have sufficient deposit.”

Chris Keane, head of mortgages at Barclays, said that other lenders and developers could look at doing similar deals to provide more choice to first time buyers. He said:

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