The magic number

As I write, Kate Nash sits at the chart-topping position of 75 with ‘Mouthwash’. In my day, to appeal to the teens, it would’ve probably been Biactol, but at least it’s reassuring that nobody can get slaughtered in the hood by this WMD.

Bus route 75 takes you from Croydon Fairfield Halls to Lewisham. Derek Acorah appears at the Fairfield later this month, and it might be an apt moment to ask him to explain that particular scary tour.

Episode 75 – Doctor Who and the Robot. With an attention grabber like that, it’s a good job the imaginations were bigger back then.

It could be argued that we are about to join David Tennant in his spacious blue box and embark on our own journey back in time. On a day that scientists announced that the Velociraptors were probably just odd looking turkeys – about three feet high and not the destroyers depicted by Spielberg – hopefully things might not be as scary as they seem.

Those who have ever worked with me will know I’m a hoarder, famed for my office that has folder after folder covering every corner. Today however, I turn to my folders at home to help assist the Doc, Martha Jones style, but without the red leather suit – now there’s a thought. Exhibit A is retrieved – the open door mortgage. ‘The quality solution for those who may have experienced credit problems’. Inside the cover and to the first key selling point: ‘All borrowers complete at the Halifax Base Mortgage Rate, and at the next quarterly reset date, and quarterly thereafter, the rate is linked to 90 Day LIBOR.’

In October 1995, LIBOR was not very well known at all – those on mortgage placement desks spent more time explaining this concept than convincing the sceptical brokers that could actually help their clients despite their plight. The maximum loan-to-value (LTV) for the self-employed? Well, most of you would have guessed by now – 75 per cent. The adverse tolerance – well, pretty much anything provided you could evidence that it was cleared before application.

Let’s get back into the Tardis and hit the button. Martha Jones is now immortalised as a state of the art cartoon and the adverse, well that’s actually 75 per cent LTV? But don’t fret because just like a caveman, we will still have a turkey for Christmas – it just won’t look like a Velociraptor.


Alliance & Leicester should be commended for communicating more in-depth criteria, such as how it views income verification and treats self-funding buy-to-lets. Detailed lending policy has always been available on the specialist lenders in the form of a packaging manual, but there has always been a reluctance to share from the traditional banks and building societies.

Abbey now considers affordability based on the applicant’s income, credit score and family structure. It has also moved into the 125 per cent LTV arena with additional borrowing above 100 per cent LTV on a secured, rather than the established unsecured basis.

In theory secured rates should be lower as the lender can reclaim the house should the applicant default. However, the reality is Abbey would not gain if it repossessed due to the LTV exposure – so we need to watch how it assesses the risk and sets the price. The risk to the applicant is that if house prices do not rise they will either need to port or settle the excess debt, whereas the unsecured element on the other products can continue with just the main mortgage being settled giving lender choice.


Amber Homeloans has removed its 95 per cent LTV criteria.

Future Mortgages has decided not to offer first-time buyers the opportunity to self-cert.

SPML has capped its LTV at 85 per cent and GMAC-RFC 75 per cent LTV.


Advantage has tightened its new build remortgage criteria effectively, pulling out of this specialist market for advances in excess of 80 per cent LTV.

The Mortgage Business has launched in the Republic of Ireland.


Amber Homeloans reduces the LTV on its self-cert non-conforming unlimited arrears product but at the new 80 per cent it is still favourable.

Future Mortgages has reverted back to holding loans on balance sheet at all LTVs with everything subject to credit score.

Kensington Mortgages has hauled back its LTV to 75 per cent.

Northern Rock has reduced its proc fees for niche and light adverse categories.

The Mortgage Works has withdrawn its 95 per cent LTV near-prime product.

Secured loans

Prestige has reduced its maximum LTV to 75 per cent for loans behind a prime lender and 70 per cent behind a non-conforming lender. It has also introduced an ‘interest only’ product.

Blemain has withdrawn its fixed rates and is not charging interest in the payment holiday period. It also has fallen to 75 per cent LTV, as has Money Partners.

London Scottish has withdrawn any flexibility around its already generous 60 per cent gross income calculation.