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Abbey withdraws 100 per cent mortgages

09/04/2008

The UK high street lender Abbey has withdrawn 100 per cent mortgages.

Chief executive António Horta-Osório suggested to pull the package from the market place.

First time buyers will require a deposit of at least five per cent in order to get on to the property ladder. Parental guarantee or a shared equity scheme can enable success on entry via the property ladder.

Lenders want to protect their profit margins during the credit crunch by rising borrowing rates and reducing their lending criteria.

Director of mortgage broker Savills Private Finance, Melanie Bien commented: "This is a huge blow for first-time buyers struggling to get on the housing ladder. Despite falling house prices in some areas it is still extremely difficult for first-time buyers to save up enough of a deposit to buy their first home."

She spoke further: "The liquidity freeze is encouraging lenders to opt for low-risk business over higher risk, and that means attracting lenders with big deposits or significant equity in their home at the expense of those without."

The Bank of Ireland and Bristol & West are now the only lenders offering 100 per cent mortgages.


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