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When housing demand and prices fall, lenders will withdraw 95 per cent LTVs – Star Letter 28/05/2021
Each week Mortgage Solutions and its sister title Specialist Lending Solutions pick the top comments from our readers.
This week’s comment was a response to the article: Sellers receive offers within a month as end of stamp duty holiday draws near.
Andy Wilson said: “When demand outstrips supply, prices will rise. Fear of loss keeps demand high.
“When the cost of buying a property increases due to stamp duty charges, and first-time buyers cannot meet strict high loan to value (LTV) criteria, demand will fall.
He added: “When demand falls, prices will fall. Lenders will withdraw 95 per cent LTV mortgages, fearing negative equity, or the cost of borrowing will rise to mitigate risk. This means demand falls further. How long can prices continue to rise?”
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