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Woolwich is latest lender to demand bigger deposits
Independent, The (London), May 8, 2008 by David Prosser
Woolwich, the mortgage lending arm of Barclays Bank, will today stop accepting business from new customers who cannot find a deposit worth at least 10 per cent of their property.
Woolwich is withdrawing all products on loans-to-value of more than 90 per cent, following a string of lenders who have made similar moves in recent weeks.
"We've always been very conservative about loan-to-value ratios, with 95 per cent being our previous maximum," a spokesman said. "Given prevailing market conditions and reports of falls in house prices, this is a prudent measure to take for both lenders and borrowers."
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Large lenders to have taken the same step include Cheltenham & Gloucester, Alliance & Leicester and Britannia Building Society, while Nationwide Building Society, the UK's second biggest mortgage lender, now offers 95 per cent loans-to-value on just two of its mortgage deals.
Moneyfacts, the personal finance analyst, said there were now 204 mortgages from 51 lenders available to borrowers with only a 5 per cent deposit, down from 997 a year ago.
The deals have been withdrawn in the context of increasing nervousness among lenders about all but the most creditworthy of borrowers, especially given a lack of funding from wholesale money markets. The housing market downturn has exacerbated this concern.
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