Lloyds Banking Group brands, Halifax, Scottish Widows and Buy-to-Let lender BM Solutions have all made the decision to stop lending above 60% LTV.
Andrew Montlake, MD of Coreco Mortgage Brokers comments:
“Not since the Credit Crunch have we seen lenders make such a flight to quality in limiting products to 60% LTV and below. This reflects the wholesale recalibration of risk that is unfolding in the mortgage market.
“This shows just how serious lenders are taking the current situation and enables them to drastically reduce the flow of business through their doors as they face up to their own staffing issues.
“In these unprecedented times, lenders, like a significant percentage of the world’s population, are going into lockdown.
“The decision of the Halifax is part logistics, of course, but to stop lending above 60% shows the seriousness with which it is taking Covid-19.
“With physical valuations on hold, for many lenders 60% LTV is the level at which they can engage their Automatic Valuation Models effectively from a risk perspective and process cases without too much human intervention.
“The issue will be that many remortgage customers may be forced to either stay with their existing lender or revert to more expensive variable rates until this crisis is over.
“The hope is that the mortgage market rebounds as fast as it is deteriorating once we come out the other side of Covid-19.”