Charcol has criticised NatWest for the handling of its decision to curb lending rates, which was...
Charcol has criticised NatWest for the handling of its decision to curb lending rates, which was announced earlier this week.
Charcol officials say they understand the decision but are concerned that Natwest had failed to communicate it to customers and intermediaries.
In contrast, Charcol pointed out Alliance & Leicester adopted a similar policy a few months ago, restricting the maximum 95% loan in London and some of the Home Counties to £100,000, but it was open about its change in criteria.
Ray Boulger, senior technical manager at Charcol, says: "It is important that lenders are open about their lending policy so that customers and intermediaries do not waste time and money applying for a mortgage for which there is little or no chance of it being accepted.
"Policy changes should only apply to new applications, not those already being processed. We consider that Royal Bank of Scotland/Natwest should now make clear those postcodes with a maximum loan to value restriction."
Boulger talked down the possibility that NatWest's decision might rock the housing market. He reasons Natwest only has a 3% share of the mortgage market so its policy change in isolation will have minimal impact on the property market.
NatWest's policy change will only affect property prices if other lenders follow suit and there is, so far, no sign of that happening, says Boulger.
"We have spoken to other major players in the 100% mortgage market and they don't have any current intention to follow suit," he adds.
Boulger thinks it was perfectly logical for NatWest to review its lending policy especially given that a large proportion of its lending activity focuses on higher loan to value loans.
Boulger also dispelled concern that the property market is overheating.
He cites the Council of Mortgage Lenders (CML) most recent lending figures published this week, which show total mortgage lending in December dropped to £14bn, a 9% reduction on November's figures.
A decline in lending in December is par for the course with the same reduction experienced that time last year.
What is interesting, pointed out Boulger, is that if you compare 2001 with the previous year, the percentage increase in December was 40% - which he says shows the market is still strong.
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