Mortgage lenders reduce borrowing limits
Published On 18 January 2008
Several UK lenders have cut the amount of the money that they are willing to lend to mortgage customers, it has been revealed.According to a new report from MoneyFacts, 11 mortgage lenders have reduced their maximum loan-to-value (LTV) on a range of products since last December.
The findings come amidst the suggestion by market watchers that the UK housing market is experiencing a downturn, with falling house prices and lower demand for property in some areas.
100 per cent mortgages, which allow customers to borrow the full value of the property without having to put down a deposit, are now no longer offered by some lenders.
David Knight, analyst at Moneyfacts.co.uk, commented: "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."
He added: "This more cautious approach of lenders starting to reduce their exposure to the property price fluctuations shows that they have a real concern over the future of the UK housing market."
According to the Department for Communities and Local Government, annual house price inflation fell to 9.5 per cent in November last year.
