20 Feb

100% mortgages 'disappearing'

100% mortgages 'disappearing'

Homebuyers who have not saved a deposit or who want to borrow more than the price of their house are set to find it harder to do so, an analyst predicts.

Julia Harris at moneyfacts.co.uk noted that only two borrowers now offer 125 per cent home loans, while there has been a drop of lenders offering 100 per cent mortgages from 41 to 28 since last November.

She added that of those lenders who did offer a 100 per cent mortgage, some were restricted to lending to professionals or part of arrangements such as shared-ownership schemes.

The cost of taking out a 100 per cent mortgage was also increasing, she went on to note.

"This is yet another example of lenders continuing to tighten their belts even further in what has become a vastly different mortgage market from this time last year," she said.

"Prospective first-time buyers are those that are going to be most affected by this move."

The price of an average property rose to £223,957 in January, up by 1.41 per cent on December's figures, according to MoneyExtra.com.
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