Mortgage providers ‘avoiding additional risks’

Mortgage providers are looking to avoid any “additional risks” and have all pulled out of the 125 per cent loan-to-value (LTV) market, according to a new report.

Since the advent of the so-called credit crunch, companies have been increasingly reluctant to enter any kind of arrangement with consumers who are thought to be at risk of letting their debt management issues get out of control and as a result 125 per cent LTV deals have been removed.

Furthermore, very few lenders are still willing to offer mortgage deals that have a LTV rate above 100 per cent and this could leave many would-be first-time buyers unable to enter the housing market, Moneyfacts.co.uk has suggested.

The price comparison firm’s mortgage analyst Denise Harvey remarked: “It seems no one is prepared to stand out from the crowd in the current environment and accept the additional risk a 125 per cent mortgage poses.”

Meanwhile, a recent report from Abbey Mortgages claimed that British homeowners are finding it increasingly difficult to decide what kind of home loan deal would be best for them.