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Decline of 100% loans disappoints mortgage expert

The mass withdrawal of 100 per cent home loans from the high street represents "yet another door closed" for UK first time buyers, financial website moneysupermarket.com has claimed.

In recent weeks, major mortgage lenders such as Northern Rock and Abbey have taken their deposit-free home loans off the market.

Financial fallout from the credit crunch - which has made mortgage firms wary of exposure to customers defaulting on their loans - has been blamed for this trend.

Buyers taking out a 100 per cent loan borrowed the entire cost of their property - a mortgage solution especially popular among young buyers with no savings and the expectation of an increasing salary.

Commenting, head of mortgages at moneysupermarket.com Louise Cuming said: "My personal view is that they were good products - I thought [100 per cent-plus mortgages] were an excellent way to get onto the housing ladder, so I'm personally very disappointed that that particular avenue has been closed to a lot of people.

"It's yet another door closed for first-time buyers, which is making it harder and harder to get new lifeblood into the mortgage industry."

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