Lenders withdrawing 90% mortgages ‘underestimated demand’, claims broker

Lenders across the country have been withdrawing their 90% loan to value products at pace in recent weeks, with only Accord and yesterday Platform re-launching some of their high LTV deals.

The likes of Clydesdale Bank, Virgin Money, Ipswich Building Society and Melton Building Society all put their 90% products on hold earlier this month as the UK started to emerge from the enforced coronavirus lockdown.

Lending sector leaders Barclays, Lloyds, Nationwide and HSBC, meanwhile, are also staying away from the high LTV market.

And Gareth Lowman, Director of Property Finance at SPF Private Clients, believes it could take the return of one of those big-hitters before cash-strapped buyers begin to enjoy some genuine choice once again.

He told EYE: “We’ve seen a few other lenders briefly come back to that end of the market in the past few weeks, but while the economy continues to open up, most lenders are struggling with resource and high demand.

“Platform has been fairly astute and they’ve seen what’s been happening, so they’ve come in with just a few products, but those are only five-year fixed rates.

“Ideally, we’d have one or two of the bigger lenders come back into that section of the market, but I think it’s largely down to resource, particularly for the likes of Barclays who have large outsourcing models in countries that are still in coronavirus lockdown.

“I think many of these lenders underestimated the demand out there and I would hate to see some of them come in and play games with the market by releasing products that are only available for 48 hours because that’s never good for the consumer.

“I’m sure we’ll start to see more lenders come back into that high LTV space fairly soon, but it will be them dipping their toe in the water and pricing their products accordingly.”

Fred Sharp, head of intermediary business at Platform, confirmed some 90% LTV products would be available through the lender’s broker partners from Friday in England and Monday in Scotland.

He added: “We recognised there is a customer need for this type of mortgage, so we wanted to be able to support this – albeit on a limited basis dependent on demand.”

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2 Comments

  1. James Wilson

    One of these sentences needs correcting.  Instead of “Platform have been fairly astute”, it should read “Platform have taken on far more risk than other more responsible lenders.  Despite widespread predictions of a correction much greater than 10% in house prices, and estimates of up to 3 million unemployed, they are prepared to gamble their investors’ capital on borrowers who can only put up 10% equity in the face of what is certain to be the most severe recession since in the early 1980s.”  No need to thank me …. 

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  2. Bob3

    Also HSBC have never stopped lending at 90% ltv they have just put a limit on the amount of 90% business they take in a day

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