Lenders retreat from 100% LTV mortgages
More and more mortgage lenders are tightening their lending criteria and cutting their loan to value (LTV) ratios in great number, according to Moneyfacts.co.uk.
The financial site claimed that current credit conditions were now affecting the amount of mortgage lending available to customers, with first time buyers and others at the bottom of the scale likely to suffer the most.
Some ten lenders have retreated from 100 per cent LTV mortgage deals since June 2007, said the site, with the riskiest deals often restricted guarantors or professionals only and building societies Barnsley and Britannia both now joining the trend and making a typical drawback from 95 per cent to 90 per cent maximum LTV on all products.
David Knight, mortgage analyst at Moneyfacts.co.uk, said: "Since the beginning of December 11th mortgage lenders have reduced the maximum loan to value they offer on some or all of their mortgage range.
"This is an understandable about turn from the lending strategies we have witnessed over the last five years or so, when lenders pushed LTVs to highs of 130 per cent, with 95 per cent products considered the norm."
Indicating that the impact on mortgage seekers will be huge, Mr Knight added that the new restrictions on lending could see the recent 'live now pay later' culture that allowed for huge LTV ratios come swiftly to an end – meaning that more prudent property-seekers may opt for rental and cut their costs.
Published 15th January, 2008
© 2008 Estates IT Limited
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More and more mortgage lenders are tightening their lending criteria and cutting their loan to value (LTV) ratios in great number, according to Moneyfacts.co.uk.