Rates drop in the wake of Rock crisis

The number of lenders offering 100 per cent loan-to-value mortgages has fallen since the start of December, new research has concluded.

Finance website Moneyfacts found that 11 lenders, including Alliance & Leicester, Yorkshire Building Society and Egg, had either cut their loan-to-value (LTV) ratios or restricted the availability of such products, while some had also increased deposits.

The move follows the problems endured by Northern Rock, a major lender of high LTV products.

Moneyfacts director of mortgages David Knight advised: "Anyone looking to take their first step onto the property ladder should carefully consider the risks of taking a high loan-to-value product."

Faced with this situation, some may wish to consider the alternative strategy of self build, rather than take out a mortgage at a potentially unfavourable rate.

Bank of England figures this month showed that in November 2007 the number of new mortgages was at its lowest level since January 2005.


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