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C&G withdraws 100% mortgage as deposits rise all round

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by Gill Montia

Cheltenham & Gloucester (C&G) is today withdrawing its 100% mortgage products; in future borrowers will need a minimum deposit of 10% if they want to apply for a loan.

The change means that a typical first-time buyer in London will need almost £25,000 to obtain a C&G mortgage.

As lending criteria continue to be reviewed, Royal Bank of Scotland and NatWest are withdrawing from providing mortgages for more than 95% of a property’s value.

Loans arranged through brokers are already affected and 100% branch-based home loan applications will be drawn in after 7th March.

Earlier this week, Nationwide raised its deposit requirement to at least 25% for its best rate products, although it retains a minimum deposit requirement of 5%.

Since the beginning of last week, six lenders in the 125% mortgage market have withdrawn their products, while last month Alliance & Leicester and Britannia building society both doubled the minimum deposit required from first-time buyers, from 5% to 10%.

Raising the cash for a deposit is a major challenge for most first-time buyers and it is likely that higher deposits will deter buyers, slowing the property market further.

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News posted: February 29, 2008

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