Deposit level drop from Abbey
June 15, 2009
Earlier this month the High Street banking giant which has recently enjoyed taking a larger share of the mortgage market, Abbey, announced that it was cutting its deposit levels for access to its most competitive deals.
This is one of a number of lenders that have made this move after some lenders were demanding at least 40 percent of the value of the home in order to access their best deals.
However, whilst the Abbey has cut its minimum deposit for its best deals the new level of deposit required is still high, and so will still rule out many groups such as first time buyers with no previous property from which to take equity, and lower income families with little in savings.
Abbey has reduced its deposit levels for its best buy mortgages to 30 percent, but for most buyers this will still mean having to lay their hands on thousands of pounds in order to access the most competitive deals.
An official from the Abbey said: ‘Increasing the LTVs on all our fixed rate mortgages that were previously available at 60% LTV to 70% LTV will help those looking to purchase a property, move home or remortgage. Our approach to mortgage lending remains prudent but this is a sensible move given some of the early signs of confidence returning to the housing market.’
However, another mortgage industry official said that the move would have little impact for most buyers, stating: ‘The move by Abbey is not enough to have a massive impact on the mortgage market, but it does show an increased appetite to lend. We will only see increases in 85% LTVs and above when the property market has bottomed out, but it is a positive sign that the figures for loans at 85% LTV and above have not deteriorated.’
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