Launch of 90% LTV products bucks trend as lenders sit on their hands
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A number of lenders launched 90% LTV deals last week, although the Bank of England has warned that lenders are generally steering clear of high LTV loans.
NatWest Intermediary Solutions and Newcastle Building Society marketed 90% LTV deals last week and Halifax a 90% direct-only deal.
Halifax launched a direct-only two-year fixed rate 90% LTV deal at 5.79% last week with no fees. A spokeswoman for the lender denied it is trying to steer business away from brokers to its direct channel.
She says: “The product has been designed for direct business and the two channels will always have separate product strategies.”
She adds that in future a brokeronly deal could be offered that is not available direct.
But the latest Credit Conditions Survey from the Bank says lenders’ appetite for lending at LTVs greater than 75% fell in Q4 2010, but in-creased for lending at low LTVs.
The survey also shows lenders do not expect an increase in the availa-bility of secured credit to house-holds over the next three months.
The Bank’s survey revealed households’ demand for secured credit to finance new house pur-chases fell unexpectedly for the third consecutive quarter, but is expected to pick up over the coming quarter. Demand for buy-to-let rose slightly - the first time it has done so since Q3 2008.
Some lenders say the changes reflect a more cautious approach to assessing the ability of consumers taking out high LTV mortgages to meet repayments and to lending to the self-employed. Consistent with this, a net balance of lenders re-ported that the loan approval rate was expected to fall in Q4 for the first time since early 2009.
Simon Rubinsohn, chief econo-mist at the Royal Institution of Chartered Surveyors, says: “Even without the Mortgage Market Re-view, lenders will continue to be cautious in the provision of finance.”
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