Accord Mortgages has temporarily withdrawn its 90 per cent LTV products for the second time in a month after seeing its volume of applications “soar”.
The intermediary-only lender said it was “reluctantly” suspending all lending on its 90 per cent LTV products for first-time buyers at 8pm last night (July 6).
Accord said it had been “forced” to temporarily withdraw the products as one of the few lenders currently offering products with a 10 per cent deposit, despite “every effort” being made to manage service levels and maintain turnaround times.
Data from Moneyfacts shows there were 72 residential mortgages available at 90 per cent LTV on June 26, less than 10 per cent of what was available at the beginning of January (751 products).
According to the lender, the volume of applications resulted in the “busiest month in the lender’s history” since it relaunched the products to first-time buyers on June 17.
The lender had relaunched 90 per cent LTV mortgages exclusively to first-time buyers, after withdrawing its range altogether due to “higher than expected” application volumes since re-entering the market following lockdown.
Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, said: “When we re-entered with products exclusively for first-time buyers we knew demand would be high and we prepared accordingly, but with the absence of so many lenders at this LTV tier, there is only so much business that our team can support whilst still maintaining a high level of service.
“We’ve been very clear and proactive with our messages around capacity challenges, and had expected more competitors to join us in this space.
"Our appetite to lending and our commitment to supporting the market, especially first-time buyers, has not changed. We know brokers have a huge challenge with the lack of high LTV lending available at the moment and once we have restored service levels we aim to be back in this market as soon as possible.”
Chris Sykes, mortgage consultant at Private Finance, commented: "It is no surprise that Accord are having to pull their 90 per cent range, they were one of the best offerings on the market for 90 per cent mortgages so became one of the main go-to lenders for this business.
"Lenders need a spread of business, they cannot have all of their lending at high loan to value or they would be considered high risk, and Accord taking a large proportion of the 90 per cent market for the last few weeks they now need to underwrite all of these applications and allow room for new lower loan to value applications to increase this spread.
"There are now few lenders left in this market again, who is next to come back in remains to be seen and the 90 per cent market is recovering a lot more slowly than initially expected."