Lenders 'relaxing mortgage application conditions'

Date:Wednesday 14th October 2009
Author: Max Freedman

An industry insider has claimed that lenders are starting to relax as they become more confident about approving mortgage deals.

Head of mortgages at Bestinvest Peter O'Donovan suggested that reduced interest on fixed-rate products and higher loan-to-value (LTV) agreements are allowing more people to be successful with their application.

He highlighted Northern Rock as the latest example, as the lender has increased its best LTV deal from 60 to 70 per cent.

But there is still plenty of progress to be made in the property market before more people can have access to mortgage finance, he commented.

Mr O'Donovan explained: "Until someone really puts the mark into the high loan-to-value, between 85 and 90 per cent, we are not really going to see a full recovery."

His comments were made following August lending figures from the Council of Mortgage Lenders, which showed that the number of new mortgage approvals has increased by 22 per cent year on year.