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Royal Bank of Scotland joins postcode lenders

Royal Bank of Scotland is following other big lenders and linking the amount it lends to postcodes, this month&#39s Money Marketing Focus reveals.

In internal document from the RBS, seen by MM Focus, the lender says it has revised its loan to values in 52 London postcode areas.

The document says “the maximum LTV for amounts between £150,001 and £200,000 has been increased from 85 per cent to 90 per cent” and “the postcodes affected by the restrictions have been changed”.

The policy is to be applied to what RBS refers to as “hotspot” areas. It says the areas represent about a third of the Greater London area and translate “approximately to Camden, Newham, Hackney, Haringey, Harrow, Lewisham, Southwark, Waltham Forest, Wandsworth”.

Entitled, Changes to Greater London Loan to Value Policy – February 2002, the document says it replaces an earlier memo on the same subject dated December 2001. However, the bank denies the existence of the memo and the policy. Deputy head of retail media relations Caroline Mooney says she is not aware of the policy and has no comment.

RBS&#39s move follows the revelation in January that Alliance & Leicester and NatWest, a subsidiary of Royal Bank of Scotland, were restricting their loan to values according to postcode areas.

However IFAs believe there is no cause for alarm, London & Country Mortgages mortgage specialist David Hollingworth says: “Unless the really big lenders start to follow suit, it will not have any effect on the market.”

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