CML in talks to boost LTVs on new-builds
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Nigel Stockton
Lenders may start to increase their LTVs for new-build homes following talks between the Council of Mortgage Lenders and house builders.
A number of lenders are offering different criteria for new-build homes compared with second-hand ones.
The trade body has confirmed it has met house builders over the issue and has more meetings planned.
Speaking at Countrywide’s National Property Showcase seminar last week, Nigel Stockton, financial services director at Countrywide, says lenders are stifling the market by offering lower LTVs for these properties.
He told delegates: “I think this is the biggest thing stopping the new homes sector and the market in general from moving forward.”
He says some lenders only offer 65% LTV on new-builds compared with 75% for other properties.
He adds: “You can’t get an 85% LTV on a new-build property so it’s a difficult market.”
In June last year Bovis Homes launched a 90% LTV deal with the Woolwich, exclusively for people buying a Bovis home. But David Hollingworth, mortgage specialist at London & Country, says these types of deals do not signal a return to high LTV lending for new-builds.
He says: “If lenders were to loosen their criteria for new-builds it would open up another type of property for first-time buyers.
“If they start offering higher LTVs they will also need to make sure they carry out realistic valuations. It’s no good offering the same rates as other properties but being tougher when evaluating the property.”
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