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‘Economy will suffer if people manipulate the system to get higher LTVs’ – Star Letter 07/08/2020

  • 07/08/2020
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‘Economy will suffer if people manipulate the system to get higher LTVs’ – Star Letter 07/08/2020
Each week Mortgage Solutions and its sister title Specialist Lending Solutions select the top comments from our readers in our Star Letter section.


First off this week was Matthew Jones under the article: Brokers need fair play from lenders in high LTV space – Hunt.

He said: “I think people are using different channels to effectively get 90-95 per cent loan to value (LTV). 

“For example, borrowing the money from relatives or getting a family member to take out a loan for the additional funds and then pay them back. All under the guise of a ‘gift’.”  

Jones added: “While on the face of it demand may be strong, there are hidden pitfalls that could cause long lasting damage to individuals, the housing market and the economy as a whole 

“Household finances are always stretched and other areas of the economy will suffer because people have been forced to manipulate the system to get the house they want.”

Mortgage holiday U-turn 

The second was from Terry Arch, who was reacting to the article: FCA wants further payment holidays reported on credit files.

He said: “Well, another U-turn.  

It was made quite clear at the beginning that taking a payment holiday, would not be reflected on new applications or remortgages. 

“Lenders will take this into account therefore creating more mortgage prisoners. This will create a nice market for lenders prepared to put their heads above the parapet. 

It does not take Einstein to work out that if they are not receiving payments during the holiday, they will have less funds to lend out in future,” he added.  

It would be interesting to know of the reduction in the amount cash flow to lenders so far. 


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