Mortgages -
Moneyfacts.co.uk notes changes to UK market - 06/03/2008
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An annual review of changes to the mortgage market in the UK has been made by financial website Moneyfacts.co.uk.
The global financial crisis triggered by the collapse of US sub-prime last summer was found to have made the biggest impact, thanks to the credit crunch that it caused.
Banks became less willing to lend to each other on the money markets - a situation which led to many nervous lenders tightening their credit criteria.
Most notably, this has led to mortgage providers becoming reluctant to pass on interest rate cuts from the Bank of England - and withdrawing some of its risky high loan to value (LTV) products.
Moneyfacts.co.uk analyst Julia Harris said: "Whereas a year ago mortgages at 95 per cent LTV were the most competitive, lenders are taking a much more cautious attitude to risk; now you are most likely to find better deals with a larger deposit, say at 75 per cent LTV."
Self-certification mortgages have also declined in availability, Moneyfacts.co.uk pointed out.
The loans do not require proof of salary from borrowers meaning that they represent too big a risk for many lenders.
"Unsurprisingly the choice of products for those who wish to self-certify is also dwindling," Ms Harris added.
"Like the full status 100 per cent LTV market, lenders are a lot more reluctant to lend at 90 per cent on self-certification products."
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