Higher LTV mortgages 'decreased due to stricter lending criteria'

Date:Tuesday 13th January 2009
Author: Susanna Kavka

The number of higher loan-to-value (LTV) mortgages has dropped due to lenders making their criteria for eligibility stricter, it has been said.

This is according to the Council of Mortgage Lenders (CML), whose spokesperson Sue Anderson acknowledged the effect this would have on first-time buyers.

While they need to save up a larger deposit and therefore wait longer, Ms Anderson said that one positive element was that this could help protect both buyers and mortgage lenders against further drops in house prices.

"Clearly first-time buyers will be benefiting when they do enter the market from the lower house prices that have come through," she commented.

Members of the CML comprise approximately 98 per cent of residential mortgage lending within the UK.

A recent report by Nationwide found that house prices dropped 15.9 per cent in 2008.

This brought them to their lowest level since the spring of 2005.

In November 2008, they fell by 0.4 per cent, then by 2.5 per cent in December.