Mortgage bar raised again

Those seeking to get on the housing ladder may find the situation becoming yet more difficult thanks to more banks announcing further increases in deposits.

Nationwide and Abbey have both said they will from today implement new rules requiring a deposit of at least ten per cent of the value of their properties for most customers.

Both lenders have announced changes that will mean very few can get a 95 per cent loan-to-value deal.

In the case of Nationwide such products will only be available on a three-year fixed-rate basis for existing customers, while the only 95 per cent deal Abbey will offer is to carry an interest rate of 6.99 per cent, reports the Times.

The moves come despite last week's intervention by the Bank of England in the liquidity markets by making available binds that it hoped could lower interbank lending rates and consequently the cost of mortgages.

Sean Gardener of Moneyexpert.com said: "Availability is the biggest hurdle despite all the Government efforts to get lenders lending."

Such a situation may prompt many yet to get on the ladder to consider the self build alternative.


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