Loan restrictions tighten for first time buyers

11/11/2009

Despite the Bank of England deciding to leave UK base rates unchanged, a number of UK mortgage providers have reduced their rates.

However borrowers may find it harder to take out a competitive new home loan from some lenders such as Woolwich, after it announced plans to tighten its affordability calculations.

The Times online describes how the bank is cutting the cost of its popular base-rate tracker deals and will introduce new deals for borrowers with a 25 per cent deposit from today.

However, Woolwich is also raising the interest rate that it uses to assess affordability, making it harder for borrowers to secure any new deal.

The news comes as it's reported house prices have continued to rise despite an increase in the number of new instructions received by agents, according to the Royal Institution of Chartered Surveyors (RICS).

The number of surveyors reporting rises rather than falls in house prices was 34 per cent in October, up from 20 per cent in September and the highest level seen since December 2006.

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