TSB has become the first bank to withdraw mortgage deals for customers with a 15 per cent deposit amid fears of a plunge in house prices.
High street banks have largely deserted customers with a deposit of 10 per cent, but last week TSB became the first to remove all home purchase, remortgage and share ownership products with a loan-to-value ratio of 85 per cent.
HSBC is now the only major bank offering mortgages with a loan-to-value ratio above 90 per cent – with only a limited number available each day. Brokers have reported selling out of the product before 8.30am.
Coventry Building Society is also offering a limited number of low-deposit mortgages on a ‘first come, first served’ basis as part of a limited deal ending tomorrow night.
One banking source said there was ‘a worry about house prices’ in the market. Banks fear they will lose money on mortgages if prices drop rapidly and repossessions cannot recoup the money loaned.
Banks have also struggled to keep up with demand while so many staff work from home.
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said it was hard for employees to deal with the usual number of sales when employees are working remotely.
‘Homeworking reduces productivity because they don’t always have as many screens,’ he said. ‘That can really reduce productivity.’
A TSB spokesman said: ‘We are working to support our customers as best we can.’