One of the country’s highest-profile mortgage lenders, HSBC, is restricting loans on apartments from today.
Only buyers of flats who have a 15 per cent deposit will be eligible for a HSBC mortgage product, and that’s 20 per cent if the apartment is a new-build.
This brings to an end the relative relaxation of HSBC’s mortgage lending, which until today has allowed 10 per cent deposits during much of the Coronavirus period.
Earlier this month Nationwide instigated a new obstacle for buyers applying for a 90 per cent mortgage - they now have to prove that no more than a quarter of their deposit has been provided by their parents.
Lloyds, too, has withdrawn its 100 per cent 'Bank of Mum and Dad' mortgage for borrowers whose parents are willing to tie up their savings for three years.
Moneyfacts says there are now fewer than 50 deals on offer for borrowers with a 10 per cent deposit compared; there were over 750 a year ago.
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I find this so frustrating... banks NEVER lose if things go south. They take back the property and sell it on, all while the poor buyers life is tuned upside down and regardless of any deposit % paid and if they do not sell the property for enough to clear the debt, then the mortgagee get's to cover that too...
If we really want the market to take off, then banks need to get back to 95% LTV and fast and stop making up these silly rules about how much of the deposit came from where/who. No need to go silly and go back to the 125% LTV Northern Rock days, but 95% mortgages need to be made more widely available. It all starts at the bottom, get the FTB market going and it will help... and with their extra cash left over from not needing a larger deposit, that can be spent on kitchens, bathrooms, etc... all helping to get the economy going again.
YES, I know this is an idealistic view, but it could just work!
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