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Barclays caps criteria on loans over 80% LTV

Barclays has tightened its LTI criteria by limiting applications for loans of over 80 per cent LTV to a maximum of 4.5 times income.

Previously, borrowers with an income of less than £50,000 could borrow up to 4 times income over 85 per cent LTV, with borrowers earning more than £50,000 allowed to borrow up to 4.5 times income.

The maximum LTI for lending below 80 per cent LTV is 5.5.

Last week, however, the lender reduced the LTV at which the lower LTI caps kick in, meaning residential applications are capped at 4.5 times income for borrowers with less than a 20 per cent deposit.

A spokesman for Barclays says: “Our LTI criteria on residential applications will be capped at a maximum of 4.5 with LTV thresholds greater than 80 per cent.

“This is part of our ongoing business planning and something we always keep under review.”

Start Financial Services manager Tom Cleary believes Barclays has tightened its criteria to control volumes.

He says: “When Santander lowered its cap from 6 times income to 5 times income last year, Barclays was left as probably the biggest mainstream lender where you could get 5.5 times income up to 85 per cent LTV.

“I think it will probably have received a significant bulk of the market’s applications since then and will be looking to control that flow with this move, because at the moment it has its head above the parapet.”

The Bank of England announced last June that, from 1 October 2014, all lenders with mortgage books greater than £100m would be required to cap the volume of loans above 4.5 times income at 15 per cent of new lending.

Accord, Aldermore, Lloyds and RBS are among the lenders that have introduced LTI caps.

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