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Home loans cutback.

THE UK's fourth biggest lender today became the latest firm to withdraw from the 100% mortgage market.

Lloyds TSB said it was pulling all of its products that will lend 100% of a property's value with immediate effect.

It added that people who took out a mortgage through its Cheltenham & Gloucester (C&G) subsidiary will now need a deposit of at least 10%.

But the group will continue to offer mortgages of between 90% and 95% of a home's value through Lloyds TSB.

It said more than 90% of these customers have their current account with the group and generally at least two other products, such as a credit card and loan, making it easier for it to assess the risk.

The group, which launched its 100% products a year ago said its decision reflected the "competitive environment in which all lenders were operating".

The announcement comes at the end of two weeks that have seen a mass withdrawal by lenders from certain areas of the market as they look to reduce the level of risk on their books.

Last week all six groups which offered loans worth 125% of a property's value withdrew them within a matter of days. These loans were particularly popular with first-time buyers,.

At the same time Scottish Widows Bank pulled out of the 100%-plus market, leaving just one lender willing to advance more than a property is worth.
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Publication:Huddersfield Daily Examiner (Huddersfield, England)
Date:Mar 1, 2008
Words:235
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