View more on these topics

Newcastle pulls out of interest-only lending

Newcastle Building Society has pulled out of interest-only lending for new borrowers.

Existing customers are unaffected by the move but those who want to borrow more money will be able to do so only on a capital and interest basis.

In a broker note published last week, the building society says: “There has been a general downward movement in the marketplace in the level of interest-only borrowing allowed by lenders, with many already having withdrawn from the market. Our move is a reflection of this to ensure we are not out of line with the rest of the sector.”

Earlier this month, NatWest and Coventry Building Society joined the growing ranks that have pulled out of interest-only lending completely.

The Co-operative Bank was the first to leave the market in May, followed in October by Nationwide. Both brands claimed their decisions were prompted by a fall in demand.

Between February and May, Santander, ING Direct, Leeds Building Society and Coventry Building Society cut their maximum LTVs from 75 per cent to 50 per cent, while Skipton Building Society cut its maximum LTV from 75 per cent to 60 per cent.

Coreco director Andrew Montlake says: “Newcastle will not be the last to pull out of interest-only.”

Recommended

John Malone: Confidence will be the key to 2013

Watching Chancellor George Osborne’s Autumn Statement made me reflect on just how much our lives are affected by economists. I remember many years ago, when working in the life industry, how an actuary joked about how he used to throw darts at the dartboard and used these figures for his projections. Carrying on this analogy, […]

What advisers are saying: The irony of multi asset investment

In 1996 Alanis Morissette released “Ironic”. If you don’t know it, the song describes various life situations followed by the two questions “Isn’t it ironic?” and “Don’t you think?” The problem with the song is that most, if not all, of the given examples do not constitute either situational or literary irony. For example: “A […]

2

Court of Appeal upholds £100m Standard Life sterling fund claim

The Court of Appeal has upheld a £100m claim by Standard Life against 11 professional indemnity insurers. Standard Life says the 11 firms, which provided PI insurance to the provider, should have covered the costs of a £100m payment it was forced to make into the Standard Life pension sterling fund during the credit crunch. […]

The Downsizing Delusion: Why relying exclusively on your home to fund your retirement may end in tears

By Steve Webb, director of policy The British obsession with homeownership can have dangerous consequences. A recent survey by Barings¹ found that up to three million people of working age were planning to rely wholly on the value of their home to fund their retirement. We are not talking about people investing in buy-to-let or […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment