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Last week Scarborough announced it was launching a purchase only two-year fixed rate 95 per cent LTV product that would be available through its nine branches in Scarborough, Leeds, Lincoln, Middlesbrough, Nottingham, Bridlington, Hull and York.

Steven Marks, lending executive for Newcastle Building Society, said while there was not anything definite on the agenda, discussions had taken place recently about offering a new product up to 95 per cent LTV that would not only be available for house purchase but also remortgaging.

He said: "Our normal maximum at the moment is 85 per cent LTV but I would not discount the possibility ourselves or others would do a product like this in the months to come."

Mr Marks said by offering such products through regional distribution it enabled lenders to identify areas that may not be subject to such large falls in house prices that could affect other parts of the country and enabled lenders to build close and potentially profitable relationships with customers.

However, lenders such as Yorkshire Building Society, Dunfermline Building Society, Cheltenham & Gloucester, Co-operative Financial Services, Cheshire Building Society, Bank of Ireland and Woolwich have all said they would not be entering the 95 per cent LTV end of the market any time soon.

David Holmes, corporate affairs manager for Yorkshire Building Society, said while the lender constantly reviewed their range the lender would be "unlikely" to change its loan-to-values in the near future.

Amanda Glover, press officer for Cheltenham & Gloucester, said high LTV products were not an area the lender historically competed in.

Helen Robertson, public relations manager for Dunfermline Building Society, said they "would not consider" launching a 95 per cent LTV product in the current climate.

Julie Mazzei, PR and communications manager for Cheshire Building Society, said the society had recently lowered its maximum loan-to-value from 90 per cent to 85 per cent and had no current plans to review this.

Catherine Turner, senior press officer for Co-operative Financial Services, said: "Our maximum loan-to-value is 90 per cent and we do not have any plans to change that in the near future."

Liz Holloway, retail PR officer for Barclays, said its mortgage lending subsidiary Woolwich did not offer 95 per cent mortgages. She said: "We had a couple of 95 per cent products but we stopped doing them a little while ago. We have no plans to reintroduce them at the moment."

Halifax, Nationwide and Abbey said they still offered 95 per cent LTV products but did not have any plans to expand their current range.