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Lloyds TSB caps help to buy loans at £150,000

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Lloyds TSB caps help to buy loans at £150,000

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Published by Max Salsbury for 24dash.com in Housing and also in Finance

Lloyds TSB caps help to buy loans at 150,000 Lloyds TSB caps help to buy loans at 150,000

Image: Mortgage via Shutterstock

In a move that could spell trouble for the government's help to buy policy, Britain's largest mortgage lender has announced it is capping loans under the scheme at £150,000.

Lloyds TSB's cap represents a drastic drop from its previous limit of £500,000.

A spokesperson for the bank said: “This is a prudent, short-term change that reflects the fact that we currently hold around a 50% share of this market and is a further step to focus our activity on supporting first time buyers who have limited options to get on to the ladder.

“We remain committed to supporting the affordable housing sector and new build market, recently extending our help to buy mortgage guarantee scheme to allow applications for those with a 5% deposit on new build properties.”

The cap only applies to the shared equity loan versions of help to buy, and does affect the help to buy 2 mortgage guarantee scheme.

Andrew Boast, co-founder of Share a Mortgage, has warned that the move is particularly bad news for those looking to buy in London. He said: "At present, the average house price in London is £437,000, which, with a 25% deposit, would require a £327,750 mortgage, more than double Lloyds' cap.

"The minimum deposit required would be £21,850."

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