Accord Mortgages, Clydesdale Bank and Virgin Money have temporarily withdrawn products at 90 per cent loan-to-value, citing “unprecedented demand”.
Accord Mortgages withdrew its range of 90 per cent LTV mortgages at 8pm yesterday (June 8) to “manage demand and reduce impact to service”.
Accord Mortgages said it had seen “higher than expected” application volumes since re-entering the market on May 20, when it began to accept residential house purchase and remortgage applications up to 90 per cent LTV.
Similarly, Virgin Money has temporarily withdrawn 90 per cent LTV products, also effective from 8pm yesterday (June 8) to “protect the service for existing applications” in its pipeline following a strong increase in demand.
Purchase and remortgage deals from Virgin Money will be unavailable, as well as new-build two- and five-year fixed rates. Its 90 per cent LTV range is still available on product transfers without additional borrowing.
Clydesdale Bank also withdrew its 90 per cent LTV range yesterday (June 8).
The move represents a u-turn after the lenders reintroduced higher LTV lending last month.
Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, said: “As one of the few lenders offering products at 90 per cent LTV, we have seen a significant increase in applications since re-launching last month.
“Our service levels are something brokers know they can rely on, so to ensure we can maintain the standards expected of us, we have taken the difficult decision to temporarily withdraw the range.
“Our commitment to supporting brokers and their clients and our desire to lend is still as strong as ever and we look forward to re-entering the market as soon as service levels allow.”
Commenting on Accord Mortgages' decision to withdraw its 90 per cent LTV range before the announcements by Clydesdale Bank and Virgin Money, Chris Sykes, mortgage consultant at Private Finance, said buyers originally looking for a 95 per cent mortgage have had to put down a 10 per cent deposit.
The number of 95 per cent LTV mortgage deals has fallen month-on-month, data from Moneyfacts has shown.
Mr Sykes said there were “only really four main options available at 90 per cent... Accord, Virgin, Clydesdale and HSBC.
“HSBC only allows a certain number of 85-95 per cent loans which are all released at 8am and gone by 8:30am."
Mr Sykes added: “Instead of 90 per cent [LTV] buyers going to 30 lenders in the past they are going to four, and banks need to manage risk and capacity so all these lenders have been absolutely inundated with 90 per cent loans”.
“On top of this we have seen a large increase in enquiries in general as pent up purchase demand from March to May comes back... so lenders need to manage their risk and their inflow of applications.”