Abbey withdrawal signals end of 100% mortgages

First time buyers have been dealt another blow in relation to getting onto the property ladder, with a move from the Abbey bank signalling the end of the 100% mortgage. Over recent years 100% mortgages have been popular amongst first time buyers, many of whom had no money to put down by way of a deposit as a result of having no previous home from which to take equity. The availability of 100% mortgage threw a lifeline to many first time buyers who would have otherwise been unable to get the finance that they needed due to lack of deposit.

However, over recent months, as the result of the ongoing global credit crunch, which has had a significant adverse effect on the mortgage market, many lenders have been withdrawing their 100% mortgage loans, leaving consumers with less and less choice. According to a recent report this week will see Abbey withdraw the last of the 100% mortgages available to borrowers in the UK, which means that all new borrowers looking for a mortgage will not have to put down a deposit.

Only one lender, Bristol West, will now offer a similar 100% mortgage deals, but this will involve getting a guarantee from the parents of the person taking out the mortgage. In the meantime an official from the Abbey said: We are withdrawing our 100% loan to value mortgage until further notice. This is normal given the current market conditions and is in line with recent moves by other lenders.

She also stated: Abbey is seeing high demand following recent competitor moves. In order to maintain high service levels on the business it writes, it is simplifying its mortgage range and re-pricing in some areas.

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