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Bank of Mum & Dad critical as banks increase minimum deposit amount amid house price slump fears

Bank of Mum & Dad critical as banks increase minimum deposit amount amid house price slump fears

 

First-time buyers need to find a deposit three times higher than before coronavirus struck, after one of Britain’s biggest lenders became the latest to pull its higher-value mortgages from the market.

Nationwide announced today that it will withdraw all mortgages where buyers have a deposit of less than 15 per cent, as fears over the economy grow.

Before lockdown put a stop to all housing market activity between late March and mid-May this year, buyers could get a mortgage if they had just five per cent of a property’s purchase price to put down.

But the enormous financial disruption caused by Covid-19 has sparked fears of falling house prices and the possibility that highly leveraged households could fall into negative equity, prompting Nationwide to withdraw these products.

Henry Jordan, the lender’s director of mortgages, 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 loan-to-value for new business.

Tim K. Dean, Credi Founder | Commentator & Expert on Family Lending, Bank of Mum & Dad and Neo-Credit Scores is available for media interviews and appearances. More…

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Credi the #1 lending management platform for friends family & their business

Formalise and manage your loan agreements online with Credi. Trusted by over 7,000 people worldwide. Takes minutes to set up

Use Credi for FREE – for all loans up to  A$5000, $5000 / €5000,  £5000 . Loans over cost A$20, $20, €20,  £20  or other other local currency amounts (sales tax may apply).

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