UK Money News
26th February 2008
Trend for larger deposits to continue
Mortgage lenders are set to demand larger deposits from customers in order to protect themselves against risk, experts have warned.
The Nationwide building society announced this week that it would require a 25 per cent deposit from borrowers wishing to access its best rate.
Northern Rock, the troubled lender recently nationalised by the government, has made a similar move.
According to moneysupermarket.com, a price comparison website, this trend is growing trend and other lenders are likely to follow suit.
"It was only a matter of time before more of this happened," a spokesman for the site said in response to the Nationwide announcement.
"This sort of restricted lending has been happening in the buy-to-let market for a while.
"The fact it is creeping into mainstream lending reflects the desire among some of the financial services industry to rein their lending in, and concentrate on boosting savings instead," the spokesman added.
The credit crunch has made lenders more risk averse and has prompted many to rein in their loan-to-value (LTV) ratios.
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