FTBs being driven out of market
With Abbey's departure from the 100 per cent loan-to-value (LTV) market, there is now just one mainstream bank offering minimum-deposit loans.
Bristol & West, a subsidiary of the Bank of Ireland, is now the sole major lender to be issuing 100 per cent LTV mortgages - and analysts have speculated that the market will dry up altogether before the end of the year.
That would leave first-time buyers with even fewer options for getting on the housing ladder, meaning more and more prospective homebuyers are expected to remain in the rental market for the foreseeable future.
Alluding to the last remaining 100 per cent LTV deal, Louise Cuming, head of mortgages at MoneySupermarket.com confirmed that she expected the Bank of Ireland to follow suit and close off the market altogether.
"It won't be long before it too falls in line with its peers, after which time the first-time buyer could become somewhat of an endangered species," she said.
She added: "The majority of lenders will now only look at people with a deposit of at least 10 per cent, and even those types of deals are diminishing rapidly … The liquidity crisis is squeezing across all products, not just the bigger LTV deals that are the traditional staple of first-time buyers."
Published 10th April, 2008
© 2008 Estates IT Limited
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With Abbey's departure from the 100 per cent loan-to-value (LTV) market, there is now just one mainstream bank offering minimum-deposit loans.