Nationwide has withdrawn its direct-only high loan to value (LTV) lending in the face of house price uncertainty to protect its borrowers from falling into negative equity.
The move means the lender has ended its dual pricing plan of lending up to 95 per cent LTV in-branch but restricting lending to 85 per cent LTV through its broker channel.
All new lending is now being equalised to a maximum of 85 per cent LTV.
Henry Jordan, director of mortgages at Nationwide Building Society, said: “The outlook for the mortgage market and house prices remains uncertain.
“As a responsible lender we must factor this uncertainty into our lending assessments, which is why we have taken the decision to reduce our maximum LTV for new business.
“Our priority at this time must be to help members keep their homes. As such, we need to ensure our members can afford their repayments, while doing what we can to protect them from falling into negative equity.
“We will continue to keep this situation under review and hope to return to lending at higher LTVs in the near future.”
The society will still allow lending up to 95 per cent LTV for product transfers and existing members moving home but for all new borrower house purchase, remortgages and first-time buyer lending, borrowers will need a deposit of at least 15 per cent.
Nationwide is also reducing fixed rates at 60 per cent LTV by up to 0.1 per cent for borrowers remortgaging to the society. Two-year fixed rates will now start from 1.09 per cent with a £1,499 fee and five-year fixed rates from 1.40 per cent with a £999 fee.
Last week, Mortgage Solutions reported that brokers were urging Nationwide to open up its direct only 90 per cent and 95 per cent LTV deals to the intermediary market.
Samantha Partington is a freelance trade and consumer journalist writing about property and personal finance. Previously she worked worked for the Daily Mail and Property Week. She is the former deputy editor of Mortgage Solutions and editor of Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and latterly for a mortgage, bridging and secured loan lender. Samantha is CeMAP qualified. Follow her on Twitter @SamJPartington1.