Press Release Summary: Many mortgage lenders have reduced their maximum borrowing levels amid expectations of a slowdown in the UK property market.
Press Release Body: London (Loans Bazaar) 15 January, 2008: Price comparison website Moneyfacts.co.uk said that eleven mortgage lenders have reduced the maximum amount of money that they are now prepared to lend to the home buyers. The loan to value ratio has been reduced by these eleven lenders on at least some of their products in the last one month.
Some lenders have discontinued offering 100% mortgages while some lenders have decided to ask for a guarantor in case of 100% mortgages. Lenders like Alliance & Leicester, Scottish Widows Bank, Barnsley Building Society, Britannia Building Society, Egg and Pi have cut their maximum loan to value ratios to 90% from 95% on at least some products.
Mortgage analyst David Knight from Moneyfacts said: "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 percent, with 95 percent products considered the norm." Knight also said that there was now increasing evidence of housing market cooling down.
Apart from the current slowdown in housing market, potential home buyers are also facing high interest rates on secured loans and mortgages, making it very difficult for them to enter the property market. The watchful approach of the mortgage lenders reflects that they have a real concern over the future of the UK housing market.
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