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Mortgages -
11 lenders cut the amount borrowable - 22/01/2008
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The price comparison site moneyfacts.co.uk has reported that 11 mortgage lenders have cut their rates of lending in a move that will greatly affect first time buyers and those wishing to remortgage. In response to fears that the property market will slow this year, the 11 lenders have reduced the maximum loan-to-value on selected products.
Some lenders previously offering 100% mortgages, such as the Cumberland and Yorkshire building societies have now ceased to do so. Others will still offer the full loan, but only with the involvement of a guarantor. Other companies such as Alliance & Leicester, Egg and Britannia Building Society have also announced changes, decreasing their rate of lending from 95% value of the property to 90% on some of their products.
According to the Department for Communities and Local Government, November saw annual house price inflation fall to its lowest rate in a year, settling at just 9.5% affected the amount borrowable on a remortgage.
Moneyfacts mortgage analyst, David Knight, commented: “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...It is not welcome news for those consumers with only a small amount of equity.”
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