One of the UK’s biggest mortgage lenders today increased the size of the deposit it demands from new borrowers to at least 10% on all but two of its products.
Nationwide Building Society is reducing its maximum loan to value ratio (LTV) to 90% on all of its products for new borrowers except its three-year fixed rate mortgage and its three-year tracker.
New customers wanting to take out the group’s standard variable deal, which it calls its base mortgage rate, will now need a deposit of at least 25%, while the maximum amount the group will advance on any of its mortgages to new borrowers is being capped at £500,000.
Sean Gardner of MoneyExpert.com said: "The biggest struggle now is not being able to afford a mortgage – it’s being able to get one. Availability is the biggest hurdle despite all the Government efforts to get lenders lending."
"If you’ve not got a substantial deposit nowadays or equity in your house then your choices are now severely limited. On average if you are remortgaging you now need a deposit of 15.5 per cent if you take out a fixed or variable mortgage."
"And one in five fixed and variable mortgages now come with a maximum loan-value of 75 per cent or less, putting even further pressure on homeowners to find enough ready cash to get a new loan."
"First time buyers and people renegotiating their mortgage for the first time will be worst affected. When disposable income is already at breaking point for many, it is frankly impossible to see how those with limited savings will find a way to get a foothold on the property ladder."