Lloyds Banking Group reduces the size of new mortgage loans
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Lloyds Banking Group, which includes Halifax and Scottish Widows Bank, is restricting its loan-to-value ratio to 60 per cent, which means new borrowers must find a 40 per cent deposit.
Lloyds has also applied the restriction to remortgage deals, which means you need at least 40 per cent equity in your home to get a loan.
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Hide AdBarclays has withdrawn the most of its mortgage deals above 60 per cent loan-to-value, while smaller lenders are also reducing their loan-to-value ratios and some have stopped accepting new mortgage applications.
Andrew Milnes of the Mortgage Advice Bureau, Bingley, says: “M & S Bank, which is part of HSBC, has cancelled all mortgage cases this morning (Thursday) where an offer has not been issued and is the first lender I have heard of doing this. I would guess that there aren’t huge numbers of people affected by this cancellation but none-the-less, it is a big impact if it affects you. It’s to be hoped that more lenders don’t follow suit here.”
He adds that most lenders are still providing a service but valuation and condition surveys, where a surveyor visits a property, have ceased for the time being. “Many lenders have automated valuation models they can use which is a positive so hopefully this will not lead to the market grinding to a halt, though many solicitors are advising clients to be very cautious about exchanging legally binding contracts at the moment.”