Mortgages for new build flats suffer decline

Friday, 18 January 2008 12:00

Obtaining mortgages for new build homes will become harder as several lenders announce their reluctance to provide loans on these properties.

According to mortgage broker John Charcol, three lenders - Mortgages Plc, West Bromwich and Preferred - this week have announced they are no longer lending mortgages above 75 per cent on newly-built flats.

Meanwhile Norwich & Peterborough and Capital Home Loans have reduced the maximum new build flat loan to value (LTV) rate to 85 per cent and Saffron has pulled out of lending on them at all.

This week the broker's technical manager, Katie Tucker, said new build properties in general would continue to cause problems for buyers in 2008. As a result, this would become an area in which borrowers would need additional help to obtain mortgages.

She added: "Properties in many areas are expected to lose value this year, predominantly as a result of the readjustment of the overpricing that has occurred over the past few years. One of the worst casualties is new build flats."

Ms Tucker said buyers should not be put off. There were still some lenders willing to provide loans on newly-built homes and she urged borrowers to seek help from a broker to find the right one.

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