Two major lenders have restricted the size of new mortgage loans and another has suspended them altogether.
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.
Barclays has withdrawn the most of its mortgage deals above 60 per cent loan-to-value, while smaller lenders are also reducing their loan-to-value ratios and some have stopped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.
The Skipton is temporarily suspending all new residential and buy-to-let mortgage lending tin a bid to keep staff safe during the coronavirus crisis and all remortgages will be limited to a maximum of 75 per cent LTV. It adds that products will continue to be available for existing customers who are looking to switch their mortgage deal.
Andrew Milnes of the Mortgage Advice Bureau, Bingley, says: “M & S Bank, which is part of HSBC, has also cancelled all mortgage cases where an offer has not been issued. 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.”
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 ma\y 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.”