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New mortgage restrictions 'make it tougher for FTBs'
29 April 2008
Low-income mortgage applicants will find it "impossible" to become homeowners due to new mortgage restrictions announced by Nationwide and Abbey, it has been claimed.
Borrowers who opt for interest-only mortgages have seen Abbey reduce the maximum loan for the mortgage product to 50 per cent of the property's value.
Abbey's move comes as Nationwide has asked borrowers to double their minimum deposit to ten per cent in order to be eligible for its mortgage deals.
Speaking to the Independent newspaper, Zoe Stevens, a spokeswoman for Nationwide, said: "These changes will allow us to maintain control of the volume of business the Society is attracting, while enabling us to continue offering our full range of mortgages to our existing members in a controlled way."
But Melanie Bien, director at the mortgage broker Savills Private Finance, told the Telegraph that it is now "extremely difficult" for new buyers to get a foot on the property ladder.
"Most first-time buyers would have been struggling to find the money for a 95 per cent loan-to-value. Now, with most deals at 90 per cent, it means only those with wealthy parents will be able to buy a property," she concluded. 
