Nationwide, Britain’s biggest building society, has reduced the maximum amount it will lend so that it can “continue to lend responsibly”.
Homebuyers and those wanting to remortgage will now be able to borrow up to a maximum of 85% of the property value, known as the loan-to-value (LTV). Existing Nationwide mortgage customers, however, may still be able to borrow up to 95% of the property value depending on their circumstances.
Henry Jordan, Director of Mortgages at Nationwide Building Society, said: “The outlook for the mortgage market and house prices remains uncertain. As a responsible lender we must factor this uncertainty into our lending assessments, which is why we have taken the decision to reduce our maximum LTV for new business.”
The building society said it hopes to return to lending at higher loan to values in the near future.
Other lenders reducing loan-to-values
Nationwide is not alone in offering lower maximum loan-to-value lending limits. Many lenders had to pull back their LTV when physical valuations were stopped by the lockdown. Since valuations have returned lenders have started to expand their mortgage ranges again but are still working through the backlog. As a result many in the market are still limited to 85% LTV.
Demand has remained high and those lenders that have returned to the higher LTV market have faced high volumes of applications. This has forced some lenders to temporarily withdraw their higher loan-to-value mortgages.
There is still a small number of lenders who are willing to lend up to 90% and others may return in time, but with the market constantly evolving, these products may come and go quickly.
Nationwide joins lenders in lowering loan-to-value ceilings