Leek United Building Society has become to latest lender to tighten its interest-only criteria by limiting its maximum loan-to-value on this type of lending to 50 per cent.
Previously the building society lent up to 75 per cent LTV on an interest-only basis.
The building society has also placed a minimum property valuation of £100,000 where it lends outside the area serviceable by its branch network, which it defines as 20 miles away from one of its branches.
Earlier this month, Money Marketing revealed ING Direct and Newcastle Building Society had cut their maximum loan-to-values on interest-only lending from 75 per cent to 50 per cent. Principality Building Society restricted its interest-only lending to three products but kept its maximum LTV at 85 per cent.
In March, Money Marketing revealed Leeds Building Society cut its maximum LTV from 75 per cent to 50 per cent and Skipton Building Society cut its maximum LTV from 75 per cent to 60 per cent. In the same month, Nationwide Building Society and Coventry Building Society cut their maximum interest-only LTV to 50 per cent from 75 per cent.
Money Marketing also revealed in March, that Santander had further tightened its interest-only criteria by announcing it would no longer accept pensions, the sale of a second property and cash savings as repayment vehicles. In February, it cut its maximum LTV from 75 per cent to 50 per cent.