State Bank of India halts new mortgage lending

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State Bank of India has indefinitely stopped accepting new mortgage business in the UK after being overwhelmed with applications.

SBI launched a buy-to-let range in the UK mortgage market in September 2011.

The bank says it expects to begin offering buy-to-let deals again shortly, but a source says lending is likely to be halted for a minimum of four months.

Earlier this month, the bank revealed it hoped to launch more buy-to-let products up to 65 per cent LTV for interest-only and 70 per cent LTV for repayment deals.

It had planned to launch into the residential mortgage market via brokers in August this year but the move has also been indefinitely delayed.

A State Bank of India UK spokeswoman says: “We currently have a large number of applications in our pipeline and are reviewing and enhancing our offering and internal processes, and therefore are processing existing applications only.”

Largemortgageloans.com director Ian Gray says: “I am surprised as last month the bank was expanding its lending. This will create a hole in the market because it was very good at large buy-to-let loans and would accept applications from companies.”