Mortgage problems grow as 125% mortgages vanish

The availability of 100 per cent plus mortgages in the UK market is dwindling, following the news that four more lenders have abandoned their 125 per cent mortgages deals this week.

Alliance & Leicester, Coventry Building Society, Abbey and Godiva Mortgages have all announced this week that they will no longer be offering such deals.

Julia Harris, an analyst with price comparison website Moneyfacts.co.uk, said: "This is yet another example of lenders continuing to tighten their belts even further in what has become a vastly different mortgage market from this time last year."

She added that new buyers would be most likely to get hit with higher premiums and fewer chances to take a mortgage without a deposit.

Another option for those looking to get on the housing ladder would be to explore the self build option, which would remove the need for a mortgage.

Earlier this month, Chester based builder TMB reported that self build business was up 15 per cent on January 2007.


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