Nationwide is temporarily pulling its mortgage offering for low-deposit borrowers including first-time buyers as Britain’s biggest building society grapples with the impact of coronavirus on the housing market.
Nationwide said that from Tuesday it would withdraw all fixed-rate and tracker mortgages above 75% loan-to-value (LTV) from sale for remortgage, first-time buyers, and new house purchases.
The building society, the UK’s second largest mortgage lender, said it will focus on supporting existing borrowers and processing ongoing applications during the crisis, and said it had experienced an “extremely high” number of inquiries from these groups
Last week, the government effectively put the UK’s housing market on hold, urging people in the early stages of buying or selling houses to delay the process and stopping estate agents from marketing new homes.
Nationwide is the latest lender to pull mortgage products from the market as providers rush to manage the fallout from the coronavirus pandemic.
Lloyds Banking Group — which includes Halifax and Scottish Widows and is the UK’s largest lender — has capped lending at 60 per cent LTV.
Barclays has limited the number of mortgage applications it is accepting from brokers and has limited high LTV products, while Vida Homeloans and Together Money have halted all new mortgage lending.
Lenders’ customer service teams have also been inundated with requests for mortgage holidays after the government promised mortgage support for homeowners affected by the virus.
Sara Bennison, who is responsible for Nationwide’s products and propositions, said the building society needed “to maintain the levels of service expected of us in the face of an extremely high number of enquiries about existing mortgages and ongoing applications”.
“That is why we have taken this decision on a temporary basis,” she continued. Bennison said that continuing to offer home loans up to 75 per cent LTV meant Nationwide could “continue supporting the housing market”.
“We continue to monitor for any updates to government advice and, in this ever-evolving situation, we ask members and brokers to bear with us and thank them for their patience.”