HSBC hits flathunters with loans clampdown

HSBC is clamping down on how much it will loan to borrowers buying flats, in the latest blow for first-time buyers.

The bank has been one of the few lenders to continue offering mortgages to borrowers with just a 10pc deposit through the coronavirus crisis. But from next Monday anyone buying a flat will need at least a 15pc deposit – or 20pc if they are buying a new-build flat.

The move will make it harder for those hoping to cash in on the recent stamp duty cut introduced by Chancellor Rishi Sunak to kick start the property market.

Last week Nationwide introduced rules requiring buyers applying for a 90pc mortgage to prove that no more than a quarter of their deposit was gifted to them by their parents. Lloyds has also temporarily pulled its 100pc ‘Bank of Mum and Dad’ mortgage for borrowers whose parents are willing to tie up their savings for three years.

There are just 48 deals on offer for borrowers with a 10pc deposit compared to 758 this time last year, according to Moneyfacts.

Andrew Montlake, of broker Coreco, said: ‘As one of the only lenders still offering 90pc loans, HSBC has been inundated.

‘I suspect the bank is trying to manage demand.’

Sunak’s stamp duty holiday means no stamp duty is payable on homes worth up to £500,000 until March next year.

An HSBC spokesman said: ‘The recent reduction in the number of providers offering mortgages at higher LTVs has led to more applicants choosing to apply with us and as much as we would love to have as many customers as possible for business reasons we need to restrict the numbers at the higher end of lending.’