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Abbey turns screw on lending criteria
16 December 2008 17:02
Abbey has announced that it is to introduce tougher criteria for mortgage lending from tomorrow (December 17th).
The high street lender will now use a rate of seven per cent to determine whether borrowers can afford their monthly mortgage payments.
The news comes on the back of recent statistics from the Council of Mortgage Lenders, which showed that home loan lending had plunged by 57 per cent over the last 12 months.
Melanie Bien, a broker with Savills Private Finance, told the Times that it was getting to the point where mortgage firms were punishing borrowers for their own careless lending policies.
She added that borrower applications for home loans should instead be considered on an individual basis, which would ensure responsible home owners were not paying for the other peoples' repayment problems.
A recent investigation by the National Landlords Association found that 71 per cent of buy-to-let owners were concerned that the number of rental arrears would soar in the next year.
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