As part of a range refresh, it has pulled out of the 100 per cent mortgage market, while its 115 per cent mortgage for professionals has also been withdrawn.
Linda Will, managing director of Accord Mortgages, told Mortgage Introducer that the lender had real concerns that the current market turbulence could have an adverse affect on property prices, meaning high LTV lending was very risky for lenders, brokers and borrowers.
She said: “We believe the credit crunch won’t be ending any time soon so what could almost be an inevitable consequence, in our view, is a risk to house prices. From our perspective, we are worried about brokers and borrowers because if house prices were to come off, you would have to be very careful about advising on 100 per cent LTVs or above. So if there was ever a time when brokers should be reigning in clients, rather than gambling on future growth, it should be now.”
Will admitted that the current situation meant brokers were having to endure a tricky time but believed things could get worse if clients were stretched to secure a property and then saw prices tail off, leaving them with the threat of negative equity.
On the adverse side, the lender has reduced the maximum LTV on its credit repair range from 95 per cent to 90 per cent as well as withdrawing completely from the unlimited sector.
Will said that with other lenders pruning ranges and pulling out of markets, it had to move with them to safeguard its offering.
“We have taken five or six times more credit repair business in the last couple of weeks than usual and most of this has been unlimited stuff. The numbers are more than we wanted but the bigger thing is that it is affecting the shape of our lending book and giving it a look which is very unlimited heavy.”
All changes came into force on 21 September.
