Paul Holmes, operations director of Firstrung, warned that FTBs faced fewer opportunities, despite a slowdown in house prices from a restructuring of the speculative end of the market. He predicted that lenders would withdraw their affordability based mortgage deals, begin to insist on near immaculate credit profiles, limit their 100 per cent mortgage offers, and withdraw from the 100 per cent market.
Holmes noted that he had already seen mortgage offers withdrawn, despite assurances that the offers were live for three months, and said: “The shame is that having been frozen out of the market for so long, the majority of FTBs will now be perceived as a poor risk. This is not due to their personal circumstances changing; it is do with lenders being forced to reassess their exposure.”
Holmes added that the true impact on the credit crunch on FTBs would only be known once the money currently earmarked for lending versus specific criteria had run out.
However, Steve Brockman, director of A2B Mtg Co Ltd, said: “The squeeze on credit will affect anyone with impaired credit, but I haven’t noticed a downturn in the FTB market. It’s adverse loan-to-values and self-cert that have been affected.”
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