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John Charcol comments on LTV drops

Moves by lenders to reduce their maximum loan to value (LTV) ratios have been commented on by brokers John Charcol.

Recently, Cheltenham & Gloucester have dropped their 100 per cent LTV home loans, through which consumers could previously borrow the entire cost of their house without a deposit.

This move has been reflected by other lenders such as Northern Rock, RBS and Abbey.

Smaller lenders such as Saffron and Accord have also dropped their maximum LTVs.

Commenting on the situation on her blog, Katie Tucker at John Charcol said: "This year, the UK will see a return to the culture of saving for a deposit. More young people will stay at home for longer, and those paying rent will have a difficult time saving as well.

"It will have a knock-on effect for the whole economy as it takes spending money for those age groups, out of the retail system - this marks a return to our parents' generation's philosophy of saving."

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