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Eleven mortgage lenders have cut the maximum amount they will loan to home buyers, according to a leading financial website.
Price comparison service Moneyfacts.co.uk said the top loan-to-value (LTV) had been slashed by the 11 since the start of December.
LTVs measure the percentage of a property's value that a bank is willing to lend as either a loan or a mortgage. The trend follows expectations that the slowdown in property values will continue.
“With mounting evidence that housing prices are cooling, combined with the increasing number of borrowers facing debt problems, it is not welcome news for those consumers with only a small amount of equity,” said Moneyfacts mortgage analyst David Knight.
Lenders such as the Cumberland and Yorkshire Building societies have stopped offering 100 per cent mortgages, and many more have cut their maximum from 95 to 90 per cent on some products.
“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,” added Mr Knight.
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